Cofounder · Equity

Do we need a standard Cofounder Agreement?

Porfirio Partida Developer at Nearsoft

October 14th, 2014

It’s very common practice to have an Advisor agreement (FD even make this easy and templatized it). Of course you have agreements with employees and investors. And there are standardized versions of those - YC is pushing SAFE, there is Series SEED, etc. What I haven’t seen much of is a standard agreement between cofounders - beyond just vesting, how to handle things if they go wrong, decision making, etc. Does this exist and if not, does it make sense to have a template (and what would be in it?
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David Fridley Founder at Synaccord

October 14th, 2014

On finding a cofounders agreement template, I have been searching for a great template also.  I did run into this::

http://www.slicingpie.com/ is a website and a book, and there is a calculator for dividing up equity.  The author Mike Moyer is working to come up with a very democratic way of dividing up the company, and deal with all of the different situations that can arise.

I have not used it so I can't speak to the pros and cons and I have heard to be cautions  because it is new and not yet well accepted by the startup community.  But at least it is educational and Mike Moyer is a very passionate presenter.  And it's all very logical.

Alexey Dmitriyev

October 14th, 2014

Shouldn't it be described in the company bylaws?

Porter Haney CEO and Cofounder at wedgies.com

October 15th, 2014

IMO your companies corporate formation documents will serve as your cofounder agreement, who is in charge of what, who owns which percentages, etc.

Jessica Alter Entrepreneur & Advisor

October 15th, 2014

We've been asked this many times and where we ended up is that people tend to rely on incorporation docs for truly formalizing. One thing people might want is sort of a "Side project guidelines" - things to make sure to ask to know who gets and is responsible for what.

Mike Mitchell Consultant: Technology Development and Management

October 17th, 2014

YES that would be fantastic. 90% if early ventures have most things in common, and having something that had already been vetted by lawyers off the shelf would be a fantastic head start. Everybody is too busy executing, and overlooks these important foundations. If you read http://www.slicingpie.com you will see lots of problematic case studies that a standard doc and methodology would help with.

Maybe you will find what you are looking for here: http://www.docracy.com

Mark Koffsky Partner, Koffsky Schwalb LLC

October 22nd, 2014

Every situation is different but having a co-founder's agreement is essential for starting up.  Issues to be addressed include: what happens if a co-founder dies or is disabled?  What happens if a  co-founder wants to quit or just falls down on the job?  In a C-Corporation, corporate bylaws generally don't address these issues.  The agreement is usually implemented via a shareholder's agreement among the co-founders.