Narrative. A Founders’ Agreement is the pre-incorporation (or early post-incorporation) contract among the people starting a company. It fixes the four things founders most often fight about later: (1) equity splits and vesting, (2) roles, titles, and decision rights, (3) IP contribution and assignment to the eventual entity, and (4) what happens when a founder leaves. Big-law practice treats this as a short-fuse interim document \u2014 the substantive provisions should be migrated into the Certificate of Incorporation, Bylaws, Restricted Stock Purchase Agreements, and the PIIA as soon as the entity is formed. Many firms skip the standalone Founders’ Agreement entirely and go straight to incorporation plus a stack of ancillary documents; this form is useful when founders need to lock in terms before they’re ready to incorporate.

THIS FOUNDERS’ AGREEMENT (this \”Agreement\”) is entered into as of [DATE] (the \”Effective Date\”) by and among the individuals listed on the signature page hereof (each, a \”Founder\” and collectively, the \”Founders\”).

1. Purpose; Formation of Entity

1.1 Business Purpose

The Founders intend to collaborate to develop and operate a business focused on [BUSINESS DESCRIPTION] (the \”Business\”) and to form a legal entity (the \”Company\”) to conduct the Business.

1.2 Entity Formation

The Founders shall cause the Company to be incorporated as a Delaware corporation (or such other form and jurisdiction as the Founders unanimously agree) as promptly as practicable after the Effective Date. Upon formation of the Company, the Founders shall cause the Company to adopt and assume the obligations set forth in this Agreement to the extent consistent with applicable law.

2. Equity Allocation

2.1 Initial Equity Split

Upon formation of the Company, the Founders shall receive shares of common stock in the percentages set forth on Schedule A, in consideration for (a) services previously rendered, (b) intellectual property contributed pursuant to Section 4, and (c) nominal cash consideration.

2.2 Vesting

All shares issued to each Founder shall be subject to a four-year vesting schedule with a one-year cliff: 25% of each Founder’s shares shall vest on the first anniversary of the Founder’s service commencement date, and the remaining 75% shall vest in 36 equal monthly installments thereafter, subject to such Founder’s continuous service to the Company. Unvested shares shall be subject to a right of repurchase by the Company at the lower of cost or fair market value upon termination of such Founder’s service for any reason.

2.3 83(b) Election

Each Founder shall file a timely election under Section 83(b) of the Internal Revenue Code of 1986, as amended, with respect to such Founder’s shares within 30 days after the date of issuance.

3. Roles, Titles, and Decision-Making

3.1 Initial Roles

The initial roles and titles of the Founders are set forth on Schedule B.

3.2 Decision-Making

Except as otherwise provided in the Company’s governance documents, decisions regarding the Business shall be made by [a majority / unanimous vote] of the Founders. Notwithstanding the foregoing, the following actions shall require the unanimous consent of the Founders: (a) issuance of additional equity; (b) incurrence of indebtedness in excess of $[AMOUNT]; (c) sale of all or substantially all of the assets or equity of the Company; (d) amendment of this Agreement or the Company’s charter documents; (e) entry into any transaction with an affiliate of a Founder.

4. Intellectual Property

4.1 Pre-Existing IP

Each Founder has listed on Schedule C all intellectual property owned or controlled by such Founder prior to the Effective Date that relates to the Business (the \”Pre-Existing IP\”). Each Founder hereby assigns to the Company (or, upon formation, shall assign to the Company) all right, title, and interest in and to the Pre-Existing IP.

4.2 Work Product

All intellectual property, work product, inventions, discoveries, and improvements conceived, developed, or reduced to practice by any Founder, alone or with others, that relate to the Business or are developed using Company resources shall be the sole and exclusive property of the Company. Each Founder hereby assigns to the Company all right, title, and interest in and to such work product.

4.3 Further Assurances

Each Founder shall execute such additional documents, including a Proprietary Information and Inventions Assignment Agreement in the form adopted by the Company, as may be necessary to effectuate the assignments contemplated by this Section 4.

5. Confidentiality

Each Founder shall hold all non-public information of or about the Company or the Business in strict confidence, shall not use such information for any purpose other than the Business, and shall not disclose such information to any third party without the prior written consent of the other Founders. This obligation shall survive termination of this Agreement.

6. Departure of a Founder

6.1 Voluntary Departure

If a Founder voluntarily ceases to provide services to the Company before such Founder’s shares are fully vested, all unvested shares shall be subject to repurchase by the Company as provided in Section 2.2.

6.2 Termination for Cause

If a Founder is terminated for Cause (as defined below), such Founder shall forfeit all unvested shares without any payment from the Company. \”Cause\” means (a) conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude; (b) willful misconduct or gross negligence materially and demonstrably injurious to the Company; (c) material breach of this Agreement or any other agreement with the Company; or (d) willful and continued failure to perform assigned duties after written notice and a reasonable opportunity to cure.

7. Non-Competition; Non-Solicitation

During the term of each Founder’s service to the Company and for a period of [12] months thereafter, each Founder shall not, directly or indirectly, (a) engage in any business that competes with the Business in any jurisdiction in which the Company operates, or (b) solicit for employment or engagement any employee or consultant of the Company.

8. General Provisions

8.1 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of [Delaware / Florida / California], without regard to conflicts-of-law principles.

8.2 Dispute Resolution

Any dispute arising out of or relating to this Agreement shall be resolved by binding arbitration administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. The arbitration shall be held in [CITY, STATE].

8.3 Entire Agreement

This Agreement (together with the schedules hereto) constitutes the entire agreement among the Founders with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral.

8.4 Amendment; Waiver

This Agreement may not be amended, modified, or waived except in a writing signed by all of the Founders.

8.5 Counterparts; Electronic Signatures

This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Electronic signatures shall be treated as original signatures.

8.6 Severability

If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.

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IN WITNESS WHEREOF, the Founders have executed this Founders’ Agreement as of the Effective Date.

FOUNDER 1: _______________________ FOUNDER 2: _______________________ Name: [NAME] Name: [NAME]

FOUNDER 3: _______________________ Name: [NAME]

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Schedule A \u2014 Equity Split Schedule B \u2014 Roles and Titles Schedule C \u2014 Pre-Existing Intellectual Property

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This form is provided for informational purposes only and does not constitute legal advice or create an attorney-client relationship. Every situation is different; consult qualified legal counsel before using or adapting this document. © Montague Law.