A founders' agreement
("Agreement") is contract that is
executed between all the co-founders of a company. The Agreement
sets forth the ownership, rights, responsibilities, dispute
resolution and other terms to be executed between the founders and
the company.
Key Terms of the Agreement
- Equity
ownership
One of the most important terms of the Agreement is
determining the proportion of equity ownership of each of the
co-founders of the company. The equity ownership of the co-founders
of the company is determined taking into consideration multiple
factors such as the monetary investment, experience,
existing intellectual property, know-how and network in the
industry. Also, the equity ownership is pertinent to ascertain the
voting rights that the co-founder may exercise.
