Founders' agreement

How it is used

Usually signed very early, before investors arrive. It covers the equity split, vesting, roles, intellectual property and leaving rules. Founders draft, sign or put in place a founders' agreement. The apostrophe is often dropped: founders agreement.

Example sentences

1. Our founders' agreement says that anyone who leaves in the first year gives back their shares.

2. Sign a founders' agreement while you are still friends, not after the first big argument.

Common collocations

• sign a founders' agreement
• draft a founders' agreement
• founders' agreement template

Related terms

• co-founderOne of two or more people who start a company together and share the ownership, the work and the main decisions from the beginning.
• vestingA system in which founders or employees earn their shares or options gradually over time, so that someone who leaves early does not keep everything.
• shareholders' agreementA contract between the owners of a company that sets out their rights and duties, such as voting, selling shares, board seats and investor protections.
• intellectual propertyCreations of the mind that a company can legally own, such as code, inventions, designs, brand names and content, protected by patents, trademarks and copyright.
• equityOwnership in a company, divided into shares. In startups, equity is what founders, employees and investors hold, and its value grows if the company succeeds.

More terms: Legal Setup & Governance

• incorporate
• limited liability company
• NDA
• board of directors