FOUNDERS AGREEMENT
This Founders Agreement (the "Agreement") is entered into as of [Effective Date] (the "Effective Date"), by and between:
[Founder 1], a corporation ("Founder 1"), and
[Founder 2], a corporation ("Founder 2").
The founders are starting a business together and record how they will own it, work in it, and leave it. This Agreement does not issue shares or membership units.
1. The company. [company name] is not formed yet. The founders will form it in Delaware, or in another state they later agree. The founders will adopt bylaws or an operating agreement, and will appoint directors or managers, consistent with this Agreement. If a later charter or operating agreement conflicts with this Agreement on equity, the charter controls for issued equity and this Agreement is amended to match.
2. Intended ownership. The intended ownership is [Founder 1]: [percent]; [Founder 2]: [percent]. These percentages are the split the founders want the company to reflect. This Agreement does not issue that equity. When the company is formed, the founders will cause it to issue equity in these percentages, subject to board approval and securities law. A person who has not been issued equity does not own it yet.
3. Vesting. Each founder's equity vests over four years from the Effective Date, unless a founder and the company agree in writing on an earlier start. Nothing vests before the first anniversary. On that anniversary, 25% vests. The rest vests in equal monthly amounts over the next 36 months. If a founder leaves, the company may buy the unvested portion for the price that founder paid for it. If they paid nothing, the price is zero. Equity that has already vested is not bought back under this sentence. If the company does not exist yet, the other founders may buy that unvested portion on the same terms and hold it for the company.
4. Roles and time. The founders will work as follows: [roles and time commitments]. A founder will not take a salary or a reimbursement unless the founders agree in writing, or the board does after it exists. Expenses paid for the business with consent are reimbursed.
5. Decisions. Until a board is in place, decisions about the business require all founders to agree. Hiring, spending above an amount they set, and bringing in a new owner are decisions under this section.
6. Ideas and work. Each founder assigns to the company, or holds in trust for the company until it exists, the inventions, code, designs, and other intellectual property they create for this business. Intellectual property a founder made before this Agreement and lists in writing stays with that founder, and they license it to the company for the business. Founders will sign the assignments the company reasonably needs.
7. Confidentiality. Each founder will keep non-public information about the business confidential and will use it only for the business. This lasts for three years after they leave, and for as long as a trade secret stays a secret.
8. Transfers. A founder will not sell, pledge, or give away their equity except with the written consent of the other founders, or to a trust or estate vehicle they control that agrees to this Agreement. A transfer that breaks this section is void.
9. Deadlock and departure. If the founders cannot decide a matter this Agreement requires them to decide, they will negotiate for 30 days. Any founder may then offer to buy another's unvested and vested equity at a stated price, and the other may accept or buy the offering founder's equity at that same price. If they still cannot agree, they will wind up the unformed venture or, if the company exists, follow its governing documents. A founder who leaves will return company property and resign any office.
10. Governing Law. This Agreement is governed by the laws of Delaware, without regard to conflict of laws principles. Any legal suit, action, or proceeding relating to this Agreement must be instituted in the state or federal courts located in Delaware, and each Party irrevocably submits to the exclusive jurisdiction of those courts.
11. General. This Agreement is the entire agreement on its subject. It may be amended only in a writing signed by the Parties, and it may be signed in counterparts, including electronic copies. If a part is unenforceable, the rest stays in effect.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
Founder 1: [Founder 1]
By: ________________________________
Name: [Signatory]
Title: [Title]
Founder 2: [Founder 2]
By: ________________________________
Name: [Signatory]
Title: [Title]
