Co Founder Equity Agreement

It`s not as much a next step as making sure you`re doing it right. Have you really had these serious discussions with your co-founders? If you were not aware of a foundation agreement, did you explain its importance? Have you worked or put pressure on everyone? You just came up with a brilliant billion-dollar startup idea; You have defined the promise of perfect value for your business; And you just met the perfect co-founder (or co-founder) to help you launch your idea. Using a pre-signed agreement template for co-founders, available online, can cause more damage than the money it can save. Consultation with a start-up documentation expert can provide a critical overview of the procedure for designing and verifying contracts and develop a comprehensive agreement for the founders. Our research sheds light on what Robin has learned in the hardest way. We look at the time that founding teams spend discussing their share fractions, and we find statistically significant differences between teams that split rapidly – without serious dialogue about personal uncertainties and expected contributions – and those with longer, more robust dialogue. Robin rushed through this discussion and missed the opportunity to discover what made his co-founder tick, whether her co-founder was enjoying her existing job, whether she was willing to join Zipcar full time, etc. In our data, we find that teams that negotiate longer are more likely to decide on an uneven split: the harder you look, the more likely you will discover significant differences. In general, we argue that while the co-founders have not learned something surprising about each other from their dialogue, they are probably not yet involved in a sufficiently serious discussion. As you can see, there is no one-time formula for setting up capital agreements. Fortunately, you don`t need to issue all your shares immediately. Peter Ziebelman, co-founder of Palo Alto Ventures, regularly advises founders to introduce stock guarantees until the roles become clear: before creating co-founder ninjas, we developed a co-founder`s agreement and discussed how to resolve potential situations such as selling the company or one of the co-founders that don`t work.

5. Get a second opinion. But legal opinions are not the only opinions! It may also be a good idea to ask a fellow entrepreneur or even an advisor to take a look at their foundation agreement. (You can obscure all personal or financial information if you feel more comfortable.) Lawyers and entrepreneurs understand that a business creation agreement is an initial assessment of the situation when the company is young. If circumstances change a little later, it is not that great. You can include procedures in this document to make the necessary changes and updates. But it`s the perfect place for you and your co-founders to rethink the problems you or your company might encounter and find solutions for the future. Since 2008, we have studied share splits accepted by more than 3,700 creators of more than 1,300 startups in the United States.

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