EQUITY AND AGREEMENTS · FOUNDER GUIDE
Founder agreement checklist: what cofounders should agree in writing
Written by CofoundAlly · Updated
The short answer
A founder agreement should cover each founder’s role and responsibilities, equity and vesting, assignment of intellectual property to the company, how decisions are made and deadlocks broken, expected time commitment, salary and expenses, confidentiality, and what happens if a founder leaves. Write it down early, while everyone is aligned, and have a lawyer review it for your jurisdiction.
Why to write it down early
Most founder disputes come from assumptions nobody stated. Agreeing terms at the start, while the relationship is good and the company has little value, is far easier than negotiating them later under pressure.
Intellectual property is the item founders most often miss
Code, designs, brand assets and customer lists created before and after incorporation should belong to the company. Without a signed IP assignment, a departing founder may have a claim to work the business depends on, and investors will ask about it during due diligence.
Plan for departures
Agree what happens to shares, roles and responsibilities if someone leaves voluntarily, is asked to leave, or can no longer work. Vesting and repurchase rights handle most of this, but write down the process too.
Founder agreement checklist
- Roles, titles and areas of responsibility for each founder.
- Equity split, vesting schedule, cliff and any acceleration.
- Assignment of all intellectual property to the company.
- Decision-making rules and how deadlocks are resolved.
- Expected weekly time commitment and any outside work.
- Salary, expenses and when founders start being paid.
- Confidentiality and, where enforceable, non-solicitation.
- What happens to shares and responsibilities if a founder leaves.
Frequently asked questions
Do we need a founder agreement before incorporating?
It is wise to agree the main terms before incorporating, then formalize them in the company’s founding documents and share agreements. Local law determines which documents you need.
Can we use a template founder agreement?
Templates are a useful starting point to structure the conversation, but have a lawyer in your jurisdiction review the final version.
What if we disagree about terms?
Treat it as useful information. If you cannot agree on roles, equity or commitment now, you will likely struggle with harder decisions later. A trial project can help you resolve doubts with evidence.
Next step
Use a CofoundAlly trial partnership to agree a short project with clear ownership before you formalize your founder agreement.
This guide is general information, not legal, tax or financial advice. Rules differ by country; check with a qualified professional before acting.