Co-founder Agreement
A Co-founder Agreement is the most important document you will sign in the early days of your startup. It prevents costly disputes over equity, roles, and IP — the top reasons startups fall apart before they scale.
What is Co-founder Agreement?
A Co-founder Agreement is a contract between the founders of a startup that governs how the company will be built and what happens if a co-founder leaves. It covers equity allocation, vesting schedule (typically 4 years with a 1-year cliff), roles and responsibilities, time commitment, IP assignment to the company, decision-making authority, and mechanisms for a departing founder's shares (buyback at cost, good leaver / bad leaver distinctions). Investors frequently require a Co-founder Agreement before writing a cheque.
What you get
- Customised Co-founder Agreement
- Equity split and founding cap table
- Vesting schedule (standard 4-year, 1-year cliff)
- Good leaver / bad leaver definitions and consequences
- IP assignment to the startup entity
- Roles, responsibilities, and time commitment
- Decision-making and deadlock resolution
- Non-compete and non-solicitation during and after
- Word + PDF format
Documents required
- Names and proposed equity split of all co-founders
- Startup name and registration status (if incorporated)
- Roles each co-founder will perform
- Expected time commitment (full-time / part-time)
- Any IP developed before the company formation
- Agreed vesting schedule (or ask for our recommendation)
How it works
Discuss Founder Structure
We understand the founding team, equity split rationale, roles, and any specific concerns about departing co-founders.
Lawyer Drafts
We draft a market-standard Co-founder Agreement with vesting, IP assignment, and founder departure mechanics.
All Founders Review
Each co-founder reviews the draft independently (ideally with separate legal counsel for significant equity stakes).
Execute
All co-founders execute on stamp paper. If the company is incorporated, the agreement is entered into between the founders and the company.
Pricing on Request
Every situation is different — get a custom quote tailored to your exact needs.
Frequently asked questions
What is a vesting schedule and why does it matter?
Vesting means co-founders earn their equity over time, not all at once. A standard schedule is 4 years with a 1-year cliff — meaning if a co-founder leaves before 1 year, they get nothing; after 1 year, 25% vests; and the remaining vests monthly. This prevents a co-founder from leaving early and keeping a large equity stake.
What happens to a departing co-founder's shares?
A good leaver (leaves for valid reasons — illness, mutual agreement) typically retains vested shares. A bad leaver (terminated for cause, joins a competitor) may forfeit unvested shares and sometimes vested shares are subject to buyback at a nominal price. We draft these distinctions carefully.
Does each co-founder need separate legal advice?
For equity above 10–15%, independent legal review is strongly recommended. However, most early-stage co-founders sign a standard market agreement together. We can represent all founders jointly on a disclosed basis for simple structures.
Should a Co-founder Agreement be signed before or after incorporation?
Ideally before incorporation (to establish the relationship clearly) and then restated or confirmed at the company level after incorporation. IP assignment, in particular, should be documented both at the personal level and at the company level.
Do investors look at the Co-founder Agreement during due diligence?
Yes. Investors routinely review the Co-founder Agreement during seed and Series A due diligence. They look for: vesting schedule, whether all IP is properly assigned to the company, decision-making provisions, and absence of any clauses that could block investment rounds.
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