The terms of the founders` agreement and the shareholders` pact are often used interchangeably. While a foundation agreement aims to define the basics such as the roles and responsibilities of the founding team, equity and penetration, a shareholders` pact regulates how shareholder transactions are managed and is therefore useful when setting up a business. 3. Take the time to chop hard things. And then it`s time for difficult discussions! That`s if you and your co-founders have to go through all the tricky things, from justice to compensation to resignation, and find out what you want to do. So what is the agreement of a founder? It is a legally binding document signed by the founders of the company or a company (even before the creation of a company) that determines the rights and obligations of the founder vis-à-vis the company (or the company) and the other. The agreement includes several legal aspects such as the purpose of the company, the role of each founder, the work obligations, the allocation of equity (shares), the rights to buy back in the event of a founder`s departure and much more. The last thing to keep in mind is not so beautiful — but it is important. And it is a non-competition clause or a confidentiality clause.
These documents ensure that you and your co-founders cannot advise you on your competitors – or even become a competitor. It`s probably not something you want to think about in the heady beginnings of a startup, but it`s worth launching a plan, just in case. This may seem quite simple – because, well, it is. But that doesn`t mean it`s not an important part of your founders` agreement! Any future agreement that requires a stake in the business concept and the technology and intellectual property associated with it must be transferred to a third party before the company is created before the creation of the company is agreed by each founder. In the case of such an agreement, the obligations arising from this cooperation agreement with the founders must be transferred to that third party. Finally, discussion of non-competition clauses and confidentiality agreements is also under consideration. Should a co-founder be able to hold shares in competing companies? Or advisor for competitors? Hopefully this is never a problem for your business. But the point of a founding agreement is to be ready, so even if you trust your co-founders more than your own grandmother, don`t give them an easy way if things change without you noticing! In the meantime, you have a clear understanding of what a foundation agreement entails and its importance. Here are some of the reasons why a founder`s agreement is essential: as a founder, you all bring something to the table.
One of you does programming, the other works on the business plan, and the third is marketing. These are all forms of intellectual property («IP») – and IP is what adds value to the business. At the end of the day, someone will buy you not just because of your blue eyes, but because they want your IP — whether it`s a computer code or a patent for a new product. If this happens, the first thing they will check during their due diligence is: who owns this IP? And if this is not clearly defined in the founder`s agreement, it will be defined by the law in your country or by the courts if the situation is uncertain. What will you do if there is a dispute over something in this agreement? In this section, you will explain this approach. Many startup founders decide that any dispute with the founding agreement will be settled by binding arbitration, but it`s up to you and your co-founders to decide what you want to do.