GoodFoundersFounder Note 014Founder Agreement

What Should a Founder Agreement Include? The 12-Point Checklist

By Ilyès, CEO & GoodFounder · 6 min read

A founder agreement is not twelve clauses to copy, it is twelve conversations to have and write down before incorporation: equity, vesting, roles, decisions, IP, assets, departures, buyback and more.

Ask what a founder agreement should include and you will get lists of clauses. Here is the reframe that matters: a founder agreement is not twelve clauses. It is twelve conversations, written down.

Every point below is a question your team will answer eventually. The only choice you have is whether you answer it now, calmly, in writing, or later, under pressure, through lawyers. I spent years on the second path professionally. Take the first.

1. The equity split, and its reasons. Not just the percentages: why these percentages. A split whose logic is written down survives the moment someone forgets it.

2. Vesting, with a cliff. Equity is earned by staying, and the schedule writes that down. Four years with a one-year cliff is the standard; deviations should be decisions, not accidents.

3. Roles and responsibilities. Who owns product, who owns business, who ships what. Vague roles are where "he is not pulling his weight" disputes are born.

4. Time commitment. Full-time, nights and weekends, a transition date from one to the other. The single most common seed of resentment is two founders with two different unspoken assumptions about this.

5. Decision-making. Which decisions need everyone, which need a majority, who breaks ties. A 50/50 team without a deadlock mechanism is a coin with no flip.

6. IP assignment. Everything created for the project belongs to the project, and later to the company. The strongest bargaining chip in bad breakups is code someone kept personal.

7. Ownership of assets and accounts. Domain, GitHub organization, cloud accounts, the Stripe login. Whoever holds the passwords holds the company, whatever the equity says. Name where each asset lives and who administers it.

8. Confidentiality. What stays inside the project, and for how long, including after someone leaves.

9. Non-solicitation, and whether you want a non-compete. At minimum, someone who leaves should not raid the team. Whether more is enforceable and fair depends heavily on jurisdiction; decide it consciously.

10. Leaver provisions. What a departing founder keeps depending on how they leave. Let vesting handle time, and reserve bad leaver treatment for genuine misconduct. The labels are marketing; the definitions are the contract.

11. Buyback mechanics and price. When equity returns to the pool, how the transfer happens and at what price. A right to buy back with no price formula is a lawsuit with extra steps.

12. Amendments, and the incorporation plan. How the agreement changes when reality changes, and how its terms will be carried into the incorporation documents. An agreement that cannot evolve becomes a dead PDF the first time life moves.

What is deliberately not on the list

Share classes, board composition, investor rights: those belong to the post-incorporation world and its shareholders' agreement. A founder agreement that plays company before the company exists governs nothing; one that governs the founder promise governs the exact period where most disputes are born.

Ilyès, CEO & GoodFounder

Frequently asked questions

Do we really need all twelve?

The conversations, yes: every one of these questions will be answered somehow, and unwritten answers default to whoever has leverage when it matters. The depth can vary. A two-person team six weeks from incorporation does not need the same detail as a four-person team a year away from it. What no team should skip: split, vesting, IP, assets, departures.

We have been working together for months without any of this. Is it too late?

It is the opposite of too late: you now have real information about how you work together, which makes every one of the twelve conversations more honest. Backdate the vesting clock to credit the work already done, and write down the deal you have actually been living.

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Related notes

This is general information, not legal advice. Goodvernance does not provide legal advice. Learn more.