Simple Founders Agreement Template

This Agreement sets out the basic understanding between the Founders about building and running the Company. The Founders will work together in good faith and in the best interests of the Company.

The Business is described in the recitals above. The Founders may change the focus of the Business only by a decision made under the Decision-Making and Voting section of this Agreement.

The Founders will cause the Company to be formed, or will confirm its existing formation, with the name [Company Name], a registered office at [Address], and a total authorized share capital of [amount and number of shares].

Key terms at a glance: the Founders' roles are described in the next section; the ownership split is [see the Equity Ownership and Split section]; the vesting period is [Vesting Period]; and the Founders' notice address for this Agreement is the address stated in the signature section.

Each Founder confirms that they have the legal capacity to sign this Agreement, that doing so does not breach any other agreement or obligation they have, and that the information they have given to the other Founders about their background and skills is accurate.

If this Agreement conflicts with the Company's charter documents, the Founders will vote their shares and take all needed steps to amend those documents so that this Agreement is followed, to the extent permitted by law.

This Agreement starts on the Effective Date and continues until the Company is dissolved, is sold, completes a public offering, or the Founders agree in writing to end it.

Each Founder will hold the title and primary role set out here: [Founder 1] as [Title, e.g., Chief Executive Officer], responsible for [areas of responsibility]; [Founder 2] as [Title], responsible for [areas of responsibility]; [additional Founders and roles].

Each Founder will devote [full time / number of hours per week] to the Company's Business and will use reasonable efforts to perform their role diligently, honestly, and professionally.

The Founders may adjust roles by mutual written agreement as the Business grows. A Founder may not unilaterally take on or drop a major responsibility in a way that leaves an important area uncovered.

Each Founder will keep the others reasonably informed about the progress of their work and about any significant issue affecting the Company. The Founders will meet at least [frequency, e.g., monthly] to review progress and plans.

No Founder may work for, advise, or hold a management role in another business during the term of their involvement, except for the activities listed in [Permitted Outside Activities] or those approved in writing by the other Founders.

Unless the Founders agree otherwise, Founders will receive compensation of [salary or none] until the Company reaches [funding or revenue milestone]. The Company will reimburse reasonable, documented business expenses approved in line with the Company's expense policy of [budget threshold or policy].

A Founder who is not able to perform their role for more than [number] consecutive days because of illness, injury, or other cause must tell the others, and the Founders will discuss in good faith how to cover the work.

On formation of the Company, the Founder Shares will be issued as follows: [Founder 1]: [percentage]% or [number] shares; [Founder 2]: [percentage]% or [number] shares; [additional Founders]: [percentage]% or [number] shares. The Founders agree this split fairly reflects their expected contributions.

Each Founder will contribute to the Company the following in exchange for their shares: [cash amount / assets / services / existing work]. The value placed on each contribution is [value or method of valuation] for [currency].

[Number]% of the Company's fully diluted share capital will be reserved for an employee and advisor incentive pool, to be created when the Founders decide it is needed. Creating or enlarging that pool will dilute all Founders in proportion to their holdings unless they agree otherwise.

If the Company issues new shares to investors or others, each Founder will have the right, but not the obligation, to buy their proportional share of the new issue on the same terms, unless the Founders approve otherwise under the voting rules of this Agreement.

Each Founder will be responsible for their own taxes arising from receiving or holding Founder Shares. Each Founder is encouraged to get their own tax advice and will consider whether to make any available tax filing relating to restricted shares within the deadline that applies to them.

The Company will keep an up-to-date record of who owns shares, and will update it after any issuance, transfer, or repurchase made in line with this Agreement.

Founder Shares will vest over [number] months starting on [Vesting Start Date] (the "Vesting Period"). "Vest" means the Founder has earned the shares and they cannot be bought back by the Company under the leaving provisions of this Agreement.

No shares vest until the Founder has been continuously involved in the Company for [cliff period, e.g., 12 months] (the "Cliff"). On the Cliff date, [percentage]% of the Founder's shares vest. After that, the remaining shares vest in equal [monthly / quarterly] installments until the end of the Vesting Period.

The Founders hold all Founder Shares from the start, with full voting and ownership rights, but unvested shares are subject to repurchase by the Company as set out in the section on a Founder leaving.

If the Company is sold or merges and the Founders no longer control the resulting business (a "Sale"), [percentage]% of each Founder's unvested shares will vest immediately before the Sale ("Single Trigger"). In addition, if a Founder is removed without Cause or resigns for Good Reason within [number] months after a Sale, all remaining unvested shares vest ("Double Trigger"). [Delete or adjust as agreed.]

Time spent on an approved leave of absence will count toward vesting for up to [number] days. After that, vesting pauses until the Founder returns to full activity, unless the Founders agree otherwise in writing.

If the Company issues a stock split, dividend, or similar change, the vesting terms will apply equally to any new shares received in respect of unvested shares.

The Founders will sign any share restriction or repurchase documents reasonably needed to carry out these vesting terms.

The Board will consist of [number] members. At signing, the members are [names]. Each Founder who holds at least [percentage]% of the Company's shares has the right to nominate [number] director(s).

Day-to-day decisions within a Founder's role are made by that Founder, as long as they are within the approved budget and business plan of [budget / plan reference].

The following Major Decisions require the approval of Founders holding at least [percentage, e.g., a majority / 66%] of the voting shares, [including the vote of each Founder holding at least [percentage]%]: issuing new shares or options; raising money or borrowing above [amount]; selling the Company or substantially all of its assets; changing the Business; approving the annual budget; hiring or firing senior staff; paying dividends; spending above [amount] outside the budget; starting legal action or settling claims above [amount]; changing Founder pay; admitting a new Founder; and dissolving the Company.

All other decisions at Board or shareholder level will be made by a simple majority of votes, with each share carrying one vote unless the Company's charter documents say otherwise.

Meetings may be held in person or by video or phone. Notice of at least [number] days is required, unless all Founders waive it. A quorum is [number or percentage] of the Founders. Written approvals, including by email, are valid.

If the Founders are deadlocked on a Major Decision for more than [number] days, they will first escalate it to [a trusted advisor or mediator]. If it is still unresolved after [number] days, any Founder may start the dispute process in the Governing Law and Dispute Resolution section, and the matter will stay as it is until resolved.

Each Founder agrees to vote their shares and use their powers to carry out this Agreement.

"Company IP" means all inventions, software, code, designs, content, data, trademarks, names, domain names, business plans, know-how, processes, and other work product, and all rights in them, that a Founder creates or develops, alone or with others, that relate to the Business or that use the Company's resources or Confidential Information.

Each Founder assigns, and agrees to assign, to the Company all rights, title, and interest in the Company IP, whether created before or after the Effective Date, from [date of first work on the Business] onward. This assignment is effective automatically when the Company IP is created, or on the Effective Date for existing Company IP.

Each Founder has listed in [Prior IP List] any IP they own before the Effective Date that is not assigned to the Company ("Excluded IP"). If a Founder includes Excluded IP in the Company's products, the Company receives a non-exclusive, worldwide, perpetual, irrevocable, royalty-free, transferable license to use it in connection with the Business.

Each Founder will sign any documents and take any steps the Company reasonably requests to record, register, or defend its ownership of Company IP, including after the Founder leaves. If a Founder cannot or will not sign, they appoint the Company as their agent to sign on their behalf for that limited purpose.

Each Founder waives, to the extent allowed by law, any personal rights in the Company IP (such as the right to be named or to object to changes), and will not assert them against the Company or its successors.

Each Founder confirms that, to their knowledge, their contributions will be original or properly licensed, and will not knowingly infringe or misuse the rights or confidential information of any former employer or third party.

Open-source materials may be used only as permitted by the Company's policy of [policy or approval process], and in a way that does not put the Company's core IP at risk.

"Confidential Information" means all non-public information about the Company, its Business, customers, investors, finances, technology, plans, and Company IP, and any information that a reasonable person would see as confidential, in any form.

Each Founder will keep Confidential Information secret, use it only for the Company's benefit, and not share it except with people who need it for the Business and are bound by similar duties of confidentiality. These duties continue for [number] years after the Founder leaves, and for trade secrets as long as they remain secret.

Confidentiality does not apply to information that is or becomes public without the Founder's fault, was lawfully known to the Founder before joining, was independently developed without using Confidential Information, or must be disclosed by law or court order (in which case the Founder will, where allowed, notify the Company first).

While a Founder is involved with the Company and for [number] months afterward, the Founder will not, directly or indirectly, own, run, work for, or advise a business that competes with the Business in [territory / market], except holding up to [percentage]% of a public company as a passive investor.

During the same period, a Founder will not solicit or hire the Company's employees or contractors, or encourage customers, suppliers, or investors to reduce or end their dealings with the Company.

Each Founder agrees these limits are reasonable and necessary to protect the Company's legitimate interests. If a court finds any limit too broad, it should be reduced to the maximum extent it can be enforced, and the rest will remain in effect.

The Company may seek urgent court orders to stop a breach of this section, in addition to any other remedies, without needing to prove actual damages to the extent permitted by law.

On leaving, each Founder will return or delete all Company property and Confidential Information, and confirm in writing that they have done so.

A Founder "Leaves" when they resign, are removed from their role, die, become permanently unable to perform their role, or otherwise stop working for the Company. A Founder must give at least [number] days' written notice before resigning.

A "Good Leaver" is a Founder who Leaves because of death, disability, removal without Cause, or resignation for Good Reason. A "Bad Leaver" is a Founder who Leaves because of removal for Cause or resignation without Good Reason. "Cause" means serious misconduct, fraud, theft, a serious breach of this Agreement not fixed within [number] days of written notice, a criminal conviction or plea involving dishonesty, or conduct that seriously harms the Company. "Good Reason" means a major cut in role or pay without the Founder's consent, or a serious breach of this Agreement by the Company or the other Founders not fixed within [number] days of notice.

On any Leaving, the Founder keeps their vested shares, but the Company, or the other Founders if the Company chooses, may buy back all unvested shares at their original purchase price or at [nominal value], whichever is lower, within [number] days after the Leaving date.

If the Founder is a Bad Leaver, the Company or the other Founders may also buy back some or all vested shares at [percentage]% of Fair Market Value. If the Founder is a Good Leaver, any buyback of vested shares will be at 100% of Fair Market Value. "Fair Market Value" is the price agreed by the parties or, if they do not agree within [number] days, the price set by an independent valuer chosen by [method], whose costs the Company will pay.

The Company may pay the buyback price in cash or by a promissory note over up to [number] months with interest of [rate], depending on the Company's cash position and any legal limits on repurchases.

A Founder who Leaves will resign from all positions with the Company, cooperate in a reasonable handover for up to [number] days, and keep following the Intellectual Property and Confidentiality and Non-Competition sections. The Founder's remaining shares will keep their ownership rights but, as long as the Founder is no longer working for the Company, will lose any special approval or board nomination rights under this Agreement.

No Founder may sell, give away, pledge, or otherwise transfer any Founder Shares, or any interest in them, except as this section allows. Any transfer that breaks this Agreement is void.

Before selling shares to a third party, a Founder must give the Company and the other Founders written notice of the buyer, price, and other terms (a "Sale Notice"). The Company, and then the other Founders in proportion to their holdings, have [number] days to buy the shares on the same terms.

If the shares are not bought under the right of first refusal, the selling Founder may sell them to the named buyer on terms no better than those in the Sale Notice within [number] days, and only if the buyer signs this Agreement and agrees to be bound by it.

If Founders holding more than [percentage]% of the shares agree to sell the Company to a third party, they may require the other Founders to sell on the same terms (drag-along). If any Founder sells shares that give a buyer control, the other Founders may join the sale on the same terms and at the same price per share (tag-along).

Unvested shares may not be transferred at all. A Founder may, with the Board's approval, transfer vested shares to a personal trust or holding company that the Founder fully controls for estate planning, if the transferee signs this Agreement and the shares return to the Founder if control changes.

Share certificates or records will carry a note that the shares are subject to this Agreement. The Company will not register any transfer that does not follow it.

This Agreement and any dispute arising from or related to it are governed by the laws of [Governing Jurisdiction], without regard to its conflict-of-law rules.

The Founders will first try to resolve any dispute through good-faith discussions. A Founder with a dispute must send a written notice describing it, and the Founders will meet within [number] days of that notice.

If the dispute is not resolved within [number] days after the notice, the Founders will try mediation with a mediator agreed by them, or chosen under the rules of [mediation institution]. The costs of mediation will be shared equally.

If mediation does not resolve the dispute within [number] days, the dispute will be finally resolved by [binding arbitration under the rules of [arbitration institution] / the courts of [Jurisdiction and Venue]]. If arbitration is used, the seat will be [city], there will be [number] arbitrator(s), the language will be [language], and the decision will be final and binding.

Either party may go to court at any time to seek urgent relief to protect Confidential Information or Company IP, or to keep the status quo until the dispute process finishes.

Each side will bear its own legal costs, unless the decision-maker decides that one side acted in bad faith, in which case that side may be ordered to pay the other's reasonable costs.

The Founders will keep the existence and content of any dispute confidential, except as needed to enforce a decision or as required by law.

This Agreement is the entire agreement between the Founders on its subject and replaces all earlier discussions, understandings, and agreements about it. It may be changed only in a written document signed by all Founders.

Notices must be in writing and sent to the address or email stated in the signature section (or a new one given by notice). Notices are treated as received when delivered by hand, [number] business days after being sent by post, or on the next business day after being sent by email without a delivery failure message.

If any part of this Agreement is found invalid or unenforceable, the rest remains in effect, and the invalid part will be replaced by a valid one that comes closest to the Founders' intention.

A Founder's failure or delay in enforcing a right is not a waiver of that right. A waiver is effective only if in writing and signed by the Founder giving it.

A Founder may not assign this Agreement or any rights or duties under it without the written consent of the other Founders, except as allowed in the Transferring Shares section. This Agreement binds and benefits the Founders' heirs, successors, and permitted assigns.

Each Founder will sign any further documents and do any further acts reasonably needed to carry out this Agreement. Each Founder confirms that they have had the chance to get independent legal advice before signing. The Founders will also, where needed, ensure the Company signs a joinder or confirmation to be bound by this Agreement.

Neither Founder is responsible for a delay or failure caused by events beyond their reasonable control, except for payment duties. This Agreement may be signed in counterparts, including electronically, and all counterparts together form one agreement.