What is a Founders' Agreement?
A Founders' Agreement is a contract between the people starting a business together. It records how equity is split, who does what, how decisions are made, and — crucially — what happens if a co-founder leaves early. It is one of the most important documents a startup can have, because founder fall-outs are among the most common reasons early companies fail.
Why you need it before you build
Handshake deals feel fine until money, control or a departure is involved. Putting the terms in writing while everyone is still friends protects the company and every founder.
What to cover
- Equity split and vesting (so equity is earned over time).
- Roles, responsibilities and time commitment of each founder.
- Decision-making and deadlock resolution.
- Intellectual property assignment to the company.
- Leaver provisions — what happens to a founder's shares if they exit.
- Confidentiality and non-compete.
Draft yours now
Create a founder-ready agreement in minutes. Related: Shareholder Agreement, Non-Disclosure Agreement, Non-Compete Agreement.
FAQ
Is a Founders' Agreement legally binding?
Yes. Once signed by all founders it is an enforceable contract.