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Founders Agreement Template: A Complete Checklist

A founders' agreement is the document that records how you and your co-founder will split ownership, make decisions, and part ways if it comes to that. Below is a section-by-section template you can take to a lawyer — and, just as importantly, the conversations to have before you fill it in.

A template only records decisions. It cannot make them for you. Most founder disputes are not caused by a missing clause — they're caused by two people who assumed they agreed on money, pace, or exit and never checked.

1. Parties, company and purpose

Name every founder, the entity (or the intent to incorporate), and what the business actually is. Vague purpose clauses cause fights when the company pivots.

Full legal names and addresses of each founder
Entity name, jurisdiction and incorporation date (or target date)
One-paragraph description of the business and its scope
Effective date of the agreement and how it survives incorporation

2. Equity split and capitalisation

The single most disputed clause. Write down not just the numbers but the reasoning behind them, so future-you remembers why.

Exact percentage or share count per founder
Rationale: prior work, capital contributed, ongoing time commitment
Option pool size reserved for early hires
How future issuance dilutes founders (pro rata vs. otherwise)
Treatment of pre-incorporation contributions and expenses

3. Vesting and cliffs

Vesting protects the founders who stay. Standard market terms are four-year vesting with a one-year cliff, monthly thereafter.

Vesting schedule and cliff length per founder
Credit for time already worked before signing
Acceleration: single-trigger, double-trigger, or none
Repurchase rights over unvested shares on departure

4. Roles, titles and decision rights

Titles are cheap; decision rights are not. Define who decides what alone, and what needs unanimous agreement.

Each founder's role, ownership area and reporting lines
Board composition and voting mechanics
List of reserved matters requiring unanimous or supermajority consent
Tie-breaker mechanism for a two-founder deadlock

5. Time commitment and compensation

Full-time, part-time and 'nights and weekends' founders should not be on identical terms without saying so explicitly.

Minimum weekly hours per founder and start date of full-time work
Salary (if any), when it starts, and the trigger for raising it
Permitted outside activities, advisory roles and side projects
Expense reimbursement policy and spending limits

6. Intellectual property assignment

Every line of code, design file and domain name must belong to the company, not an individual. Investors will check this in diligence.

Assignment of all existing and future work product to the company
Schedule of pre-existing IP that is explicitly excluded
Ownership of accounts, domains, repositories and social handles
Confidentiality obligations that survive departure

7. Departure, removal and buyback

Define 'good leaver' and 'bad leaver' now, while everyone is still friendly and nobody knows who it will apply to.

Voluntary resignation vs. removal for cause
What happens to vested and unvested equity in each case
Buyback price formula and payment terms
Notice periods and handover obligations

8. Share transfer restrictions

Stops a founder's shares ending up with a stranger, an ex-spouse, or a competitor.

Right of first refusal for the company and remaining founders
Tag-along and drag-along rights
Restrictions on pledging or gifting shares
Treatment on death or long-term incapacity

9. Disputes, dissolution and exit

Agree the exit philosophy before an acquirer is in the room, not after.

Escalation path: direct conversation, mediation, then arbitration
Governing law and venue
Thresholds for accepting an acquisition offer
What happens to the IP and assets if the company winds down

Before you sign: the alignment check

Every clause above is the legal encoding of an answer. If you haven't answered the underlying question honestly — separately, before you compare notes — the clause just formalises a misunderstanding. Work through these first:

Do we agree on what 'success' looks like in five years?
What size exit would each of us happily accept — and would refuse?
How much personal money is each of us able and willing to risk?
How long can each of us go without a salary?
Who has final say when we genuinely disagree?
What behaviour from the other person would be a dealbreaker?
What personal commitments could change our availability in the next two years?

Run the compatibility audit before the paperwork

FounderSync asks you and your co-founder 20 questions across seven partnership dimensions — vision, money, work style, roles, personal circumstances, exit and social impact. You answer privately, then get one shared report showing where you align, where you don't, and exactly what to discuss. About 40 minutes, before the lawyers.

Start your audit

This guide is general information, not legal advice. Have a qualified lawyer in your jurisdiction review any agreement before you sign it.