Contract Checklist

Founders' Agreement Review Guide

Starting a company with friends? A Founders' Agreement prevents future fights by defining who owns specific equity and what happens if someone leaves.

Critical Red Flags

No Vesting: Founder gets all equity upfront.

50/50 Split: Can lead to deadlock in decisions.

IP Retention: Founder owns the code, not the company.

No Shotgun Clause: No way to resolve deadlocks.

Must-Have Clauses

Vesting Schedule: 4 years with 1 year cliff.

Cliff Period: No equity if leaving in year 1.

Roles & Responsibilities: Who is CEO vs CTO.

IP Assignment: All work belongs to the entity.

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