R E S O U R C E S
Legal Paperwork 101: Founders Agreements
You probably still remember that first afternoon, sketching ideas
on a napkin and talking excitedly about opportunities and growth
paths while sharing lattes at the local coffee house. The
intellectual rush of building a company is one of the top
reasons people start up new ventures, but it's critical to
detail "who'll do what" early in the life of your company.
In fact, we believe that one of the most important documents
you'll create as a startup
is the Founders Agreement. Defining the framework of
the team who help birth the company, the Founders Agreement
codifies a number of
critical business issues, notably including:
- Nature of the prospective business
- A succinct business plan
- Identity and proposed titles of the entrepreneurs
- Legal/Taxable nature of the organization
- Apportionment of stock
- Consideration paid for stock, either cash or "sweat"
- Identification of any intellectual property signed over
to the business by any of the founders
- Initial operating capital
- Disposition of shares when one of the members dies,
wants to sell, or is forced to sell by court order
Not all founders agreements explicitly include every one
of these elements, but
it's a very good idea to at least talk about all of these
issues in detail with your partners early on.
Next up: let's have a look at non-disclosure agreements and
when you'll want to use them.
please continue reading...
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