What is a Founder Co-Founder Agreement?

A Co-Founder Agreement is a foundational document that dictates the relationship among company founders. It covers equity splits, roles, vesting schedules, and what happens if a founder leaves a startup in India.

Key Clauses to Watch Out For

When drafting or signing a Founder Co-Founder Agreement in India, pay close attention to:

  • Vesting Schedules (Cliff): Standard practice is a 4-year vesting with a 1-year cliff to protect the cap table.
  • Roles and Responsibilities: Explicit expectations to prevent operational conflicts.
  • Departure / Removal Provisions: Mechanism for forced buyouts or 'Good Leaver/Bad Leaver' clauses.

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Who Needs This Agreement?

Early-stage startup teams looking to formalize their business relationship before incorporating as a Private Limited Company or LLP in India.

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