Ask a lawyer:
Draft a Co-Founder Agreement for a technology startup.
Co-Founder Agreement for a Technology Startup
Table of Contents
Introduction
Definitions
Purpose and Scope
Roles and Responsibilities
Equity Ownership
Intellectual Property
Decision Making and Voting
Compensation and Benefits
Confidentiality
Non-Compete and Non-Solicitation
Dispute Resolution
Termination
Miscellaneous Provisions
Signatures
1. Introduction
This Co-Founder Agreement (the "Agreement") is made and entered into as of [Date], by and between [Founder 1 Name], residing at [Founder 1 Address], and [Founder 2 Name], residing at [Founder 2 Address], (collectively referred to as the "Co-Founders").
2. Definitions
Company: The technology startup to be formed by the Co-Founders, tentatively named [Company Name].
Equity: Ownership interest in the Company, represented by shares or units.
Intellectual Property: All patents, trademarks, copyrights, trade secrets, and other proprietary rights related to the Company's business.
3. Purpose and Scope
The purpose of this Agreement is to outline the terms and conditions governing the relationship between the Co-Founders, including their roles, responsibilities, equity ownership, and other key aspects of the business.
4. Roles and Responsibilities
[Founder 1 Name]: [Detailed description of roles and responsibilities, e.g., CEO, responsible for overall strategy, fundraising, and business development].
[Founder 2 Name]: [Detailed description of roles and responsibilities, e.g., CTO, responsible for technology development, product management, and technical team leadership].
5. Equity Ownership
Initial Equity Split: The Co-Founders agree to the following initial equity split:
[Founder 1 Name]: [Percentage]% of the Company's equity.
[Founder 2 Name]: [Percentage]% of the Company's equity.
Vesting Schedule: The equity will vest over a period of [Number] years, with a [Number]-month cliff. In the event of a Co-Founder's departure, unvested shares will be forfeited.
6. Intellectual Property
Ownership: All intellectual property developed by the Co-Founders related to the Company's business shall be owned by the Company.
Assignment: Each Co-Founder agrees to assign all rights, title, and interest in any intellectual property created during the course of their work for the Company to the Company.
7. Decision Making and Voting
Board of Directors: The initial Board of Directors will consist of the Co-Founders.
Voting: Decisions will be made by a majority vote of the Board of Directors. In the event of a tie, [Founder 1 Name] will have the deciding vote.
8. Compensation and Benefits
Salaries: The Co-Founders will initially receive the following salaries:
[Founder 1 Name]: KES [Amount] per month.
[Founder 2 Name]: KES [Amount] per month.
Benefits: The Co-Founders will be entitled to standard employee benefits, including health insurance, paid time off, and other benefits as determined by the Board of Directors.
9. Confidentiality
Confidential Information: Each Co-Founder agrees to keep all confidential information related to the Company's business strictly confidential and not to disclose it to any third party without the Company's prior written consent.
10. Non-Compete and Non-Solicitation
Non-Compete: During the term of this Agreement and for a period of [Number] years thereafter, the Co-Founders agree not to engage in any business that competes with the Company.
Non-Solicitation: During the term of this Agreement and for a period of [Number] years thereafter, the Co-Founders agree not to solicit any employees, customers, or clients of the Company.
11. Dispute Resolution
Mediation: In the event of a dispute arising out of or relating to this Agreement, the Co-Founders agree to first attempt to resolve the dispute through mediation.
Arbitration: If mediation fails, the dispute shall be resolved by binding arbitration in accordance with the rules of the [Arbitration Institution] in Kenya.
12. Termination
Voluntary Termination: Either Co-Founder may terminate this Agreement by providing [Number] days' written notice to the other Co-Founder.
Involuntary Termination: The Agreement may be terminated by the Company for cause, including but not limited to breach of this Agreement, gross misconduct, or failure to perform duties.
13. Miscellaneous Provisions
Governing Law: This Agreement shall be governed by and construed in accordance with the laws of Kenya.
Entire Agreement: This Agreement constitutes the entire agreement between the Co-Founders and supersedes all prior agreements and understandings, whether written or oral.
Amendments: Any amendments to this Agreement must be in writing and signed by both Co-Founders.
14. Signatures
IN WITNESS WHEREOF, the parties hereto have executed this Co-Founder Agreement as of the day and year first above written.
[Founder 1 Name]
Signature: ___________________________
Date: _______________________________
[Founder 2 Name]
Signature: ___________________________
Date: _______________________________
Conclusion
A Co-Founder Agreement is a crucial document for any startup, as it clearly outlines the roles, responsibilities, and expectations of each founder. This helps in preventing disputes and ensuring a smooth operation of the business. By addressing key aspects such as equity ownership, intellectual property, decision-making, and dispute resolution, the Co-Founders can focus on growing their business with a clear understanding of their mutual commitments.
TLDR
A Co-Founder Agreement is essential for outlining the roles, responsibilities, and expectations of each founder in a technology startup. It covers aspects such as equity ownership, intellectual property, decision-making, and dispute resolution to ensure smooth business operations and prevent disputes.
Sources:
Answered by mwakili.com