Put the Hard Co-Founder Decisions in Writing

Use this founders agreement template to settle the commercial questions now: ownership, vesting, responsibilities, authority, intellectual property, departures, transfers, and dispute handling. It is a planning worksheet—not an execution-ready contract, legal advice, or tax advice. Complete it together, then ask qualified counsel and tax advisers in the company’s jurisdiction to convert the decisions into coordinated formation, equity, service, and IP documents.

Copyable founders agreement drafting template

PLANNING TEMPLATE AND DRAFTING WORKSHEET

This worksheet records proposed commercial terms only. It is not an execution-ready legal agreement and does not provide legal or tax advice. Do not sign it or issue equity based on it without local legal and tax review.

Complete every applicable placeholder. Before executing any binding document, reconcile the arrangement with the company’s formation documents, equity agreements, employment or consulting agreements, IP assignments, required approvals, and ownership records.

Copy the worksheet into a shared document. Use N/A rather than leaving a field blank, and place unresolved questions in a decision log.

1. Company and founder details — essential

Proposed effective date: [DATE]

Company or proposed company name: [NAME]
Business description: [DESCRIPTION]
Entity type: [CORPORATION / LLC / PARTNERSHIP / OTHER / UNDECIDED]
Formation status: [NOT FORMED / FORMED]
Formation date, if applicable: [DATE]
Registration or file number: [NUMBER]
Formation jurisdiction: [JURISDICTION]
Proposed governing law: [JURISDICTION]

Founder 1
Legal name: [NAME]
Address: [ADDRESS]
Email: [EMAIL]

Founder 2
Legal name: [NAME]
Address: [ADDRESS]
Email: [EMAIL]

Additional founders: [ADD AS NEEDED]

2. Ownership schedule — essential; local counsel required

Use percentages and share or unit counts. If the company has not been formed, label them as proposed. State whether each percentage uses issued-and-outstanding ownership, fully diluted capitalization, or another defined denominator.

Founder	Proposed ownership	Contributions	Commitment and vesting
[Name]	[%]; [shares/units]	Cash: [ ]; property/IP: [ ]; prior work: [ ]	Future commitment: [ ]; vesting start: [ ]
[Name]	[%]; [shares/units]	Cash: [ ]; property/IP: [ ]; prior work: [ ]	Future commitment: [ ]; vesting start: [ ]

Capitalization basis: [ISSUED AND OUTSTANDING / FULLY DILUTED / OTHER]
Total shares or units assumed: [NUMBER]
Option or incentive pool assumed: [NUMBER OR %]
Convertible or promised interests included: [DETAILS]

Allocation assumptions:
- Expected future time contribution: [DETAILS]
- Prior work credited: [DETAILS]
- Contributed IP or property: [DETAILS]
- Cash contributed: [DETAILS]
- Responsibilities and risk assumed: [DETAILS]
- Other assumptions: [DETAILS]

3. Roles, authority, time, and compensation — essential

For each founder:

Title: [TITLE]
Principal responsibilities: [RESPONSIBILITIES]
Measurable commitments or milestones: [COMMITMENTS]
Expected time allocation: [HOURS, DAYS, OR %]
Start date: [DATE]
Cash compensation: [AMOUNT / NONE / SUBJECT TO APPROVAL]
Benefits: [DETAILS / NONE / SUBJECT TO ELIGIBILITY]
Expense approval limit: [AMOUNT]
Hiring authority: [SCOPE]
Contract-signing authority: [SCOPE AND LIMIT]
Banking or payment authority: [SCOPE AND LIMIT]
Authority to bind the company: [SCOPE / NONE WITHOUT APPROVAL]
Reporting or accountability process: [DETAILS]
Review date: [DATE]

4. Outside activities and conflicts — essential

Existing employment, consulting, advisory, academic, or board roles:
[LIST FOR EACH FOUNDER]

Permitted outside activities:
[DEFINE]

Activities requiring prior disclosure:
[DEFINE]

Activities requiring approval:
[DEFINE]

Approval threshold and decision maker:
[DEFINE]

Conflict-review process:
[DEFINE DISCLOSURE, RECUSAL, REVIEW, AND DOCUMENTATION STEPS]

Do not assume every founder must work 40 hours a week or accept a blanket ban on outside work. One supplied template uses those restrictions as proposed terms, not universal requirements. Choose commitments that fit the company, and ask local counsel to review any restrictive covenant or approval rule (founders agreement template PDF).

5. Governance and voting — essential; local counsel required

Board or management body:
- Initial composition: [NAMES / SEATS]
- Appointment and removal rights: [DETAILS]
- Observer rights: [DETAILS]
- Quorum: [THRESHOLD]
- Ordinary approval threshold: [THRESHOLD]

Founder or shareholder voting:
- Voting basis: [ONE VOTE PER SHARE / PER PERSON / OTHER]
- Ordinary approval threshold: [THRESHOLD]
- Supermajority threshold: [THRESHOLD]

Reserved matters:
- Equity issuance: [THRESHOLD]
- Significant borrowing: [THRESHOLD AND AMOUNT]
- Founder compensation changes: [THRESHOLD]
- Sale of the company or material assets: [THRESHOLD]
- Licensing or transferring core IP: [THRESHOLD]
- Material change to the business: [THRESHOLD]
- Related-party transactions: [THRESHOLD]
- Other reserved matters: [DETAILS]

Deadlock path:
1. Good-faith meeting within [NUMBER] days.
2. Written issue statement and proposed solutions within [NUMBER] days.
3. Mediation with [MEDIATOR/PROCESS] within [NUMBER] days.
4. Referral to [INDEPENDENT DIRECTOR/ADVISER] for [BINDING/NON-BINDING] input.
5. If unresolved, use a counsel-drafted [SEPARATION/BUY-SELL/OTHER] mechanism.

Interim operating authority during a deadlock: [DEFINE]
Allocation of process costs: [DEFINE]

6. Confidentiality and intellectual property — essential; local counsel required

Confidential information definition: [DEFINE]
Permitted use and disclosure: [DEFINE]
Required security measures: [DEFINE]
Legally compelled disclosure procedure: [DEFINE]
Return or deletion obligations: [DEFINE]

Covered company-related work: [DEFINE]
Assignment to be implemented in: [FOUNDER AGREEMENT / SEPARATE AGREEMENT]
Excluded or pre-existing IP: [SEE SCHEDULE D]
Third-party obligations: [SEE SCHEDULE E]
Open-source review process: [OWNER AND PROCESS]
Patent and other filing cooperation: [DEFINE]
Moral-rights treatment and statutory exclusions: [LOCAL COUNSEL]

These are issue-spotting fields, not assignment language. Local counsel must draft the operative terms for the relevant people, work, entity, and jurisdiction.

7. Vesting, departures, and transfers — essential; local counsel required

Vesting commencement date: [DATE]
Prior-service credit: [PERIOD / NONE]
Vesting schedule: [DESCRIBE]
Cliff: [DESCRIBE / NONE]
Acceleration: [NONE / SINGLE-TRIGGER / DOUBLE-TRIGGER]
Acceleration event and amount: [DEFINE]
Qualifying termination and time window: [DEFINE]

Unvested equity treatment: [DEFINE]
Repurchase-right holder: [COMPANY / FOUNDERS / OTHER]
Repurchase price or formula: [DEFINE]
Original purchase price: [AMOUNT]
Exercise deadline: [NUMBER OF DAYS]
Payment terms: [DEFINE]

Vested equity after departure: [DEFINE]
Transfer restrictions: [DEFINE]
Valuation method and valuation date: [DEFINE]
Valuation dispute process: [DEFINE]
Required notices and adherence documents: [DEFINE]

8. Disputes and execution planning — local counsel required

Proposed governing law: [JURISDICTION]
Proposed court forum: [FORUM]
Mediation preference: [DETAILS]
Arbitration preference, if any: [DETAILS]
Interim or emergency relief issues for counsel: [DETAILS]
Proposed notice method and addresses: [DETAILS]
Proposed amendment threshold: [DETAILS]
Electronic-signature and counterpart requirements to review: [DETAILS]

Anticipated parties to final documents:
- Company, if formed: [NAME]
- Founder 1: [NAME]
- Founder 2: [NAME]
- Additional parties: [ADD AS REQUIRED]

Required company signatory: [ROLE / UNDECIDED]
Approvals required before execution: [BOARD / MANAGER / MEMBER / SHAREHOLDER / OTHER]
Documents expected to be signed: [LIST]
Counsel responsible for preparing or reviewing them: [NAME / UNDECIDED]

Do not add signatures to this planning worksheet. Counsel should identify the proper parties, approvals, execution sequence, and operative documents.

9. Schedules and related documents — essential

• Schedule A: Ownership and contribution schedule
• Schedule B: Founder responsibilities and authority
• Schedule C: Reserved decisions and approval thresholds
• Schedule D: Pre-existing IP and excluded materials
• Schedule E: Third-party obligations and licensed components
• Schedule F: Related equity documents, including purchase agreements
• Schedule G: Departure matrix
• Schedule H: Existing obligations, conflicts, and permitted outside activities

Optional modules may address insurance, founder loans, information rights, drag-along and tag-along provisions, pre-emption rights, or acquisition acceleration. Their suitability depends on the entity, jurisdiction, capitalization, financing plan, and other governing documents.

Choose the right document for the entity and stage

One form cannot safely perform every job before and after formation.

Situation	Use now	Add or replace later	Main risk
Company not formed	Unsigned commercial worksheet or counsel-drafted pre-incorporation agreement	Formation documents, equity approvals, purchase agreements, IP and service agreements	Proposed equity is never properly authorized or issued
Existing corporation with founder-shareholders	Shareholder-oriented agreement coordinated with charter and bylaws	Restricted-stock documents, approvals, ledger updates, joinders	Agreement conflicts with corporate records
Founder also serving as employee or consultant	Separate employment or consulting agreement	Coordinated governance, equity, confidentiality, and IP documents	Service contract does not resolve the founder split, voting, or deadlock

It requires substantial revision for a proposed company and should not be carried into an LLC, partnership, or non-U.S. entity without entity- and jurisdiction-specific review.

Keep co-founder governance distinct from an individual founder’s services. A filed EQRx agreement covered one founder’s consulting services, compensation, confidentiality, conflicts, authority, and work product. It contemplated 750,000 common shares, subject to board approval and a separate restricted-stock purchase agreement, but did not establish a multi-founder equity split or deadlock process (SEC-filed EQRx founder agreement).

Before selecting vesting, transfer, leaver, restrictive-covenant, or tax terms, identify:

Entity type: [ ]
Formation jurisdiction: [ ]
Governing law: [ ]
Founder service status: [EMPLOYEE / CONSULTANT / DIRECTOR / OTHER]
Type of equity or contractual interest: [ ]
Date already issued, if any: [ ]
Other governing documents: [ ]

Set equity and vesting with explicit assumptions

There is no universally correct founder split. A useful discussion can account for expected future commitment, prior work, contributed IP or property, cash, responsibilities, and risk. Record those assumptions so the allocation remains understandable if circumstances change.

Use ownership percentages and exact share or unit counts. “Alex owns 40%” is ambiguous unless the denominator—issued shares, fully diluted capitalization, or another defined model—is stated.

Worked vesting example

Four years with a one-year cliff is a recurring convention in the supplied founder templates, not a legal requirement. In that example, 25% vests after 12 months and the remaining 75% vests monthly through month 48 (founder agreement template with vesting).

Assume a founder purchases 480,000 restricted shares and vesting begins January 1:

• Months 0–11: 0% vested
• Month 12: 120,000 shares vested
• Months 13–48: 10,000 shares vest each month
• Month 48: 480,000 shares vested

If service ends after 18 completed months:

• Cliff vesting: 120,000 shares
• Six post-cliff installments: 60,000 shares
• Total vested: 180,000 shares
• Total unvested: 300,000 shares

A pre-cliff founder may already hold restricted shares even though none have vested. Depending on the operative documents, those unvested shares may be subject to a company repurchase right rather than being treated as if the founder never owned equity. The documents must state who holds that right, the applicable price, the exercise deadline, payment terms, approvals, and transfer procedure.

Choose an acceleration approach instead of leaving it implicit:

• None: no acceleration following a sale or termination.
• Single-trigger: a defined event, often a change of control, accelerates a stated amount.
• Double-trigger: both a change of control and a qualifying termination within a defined period are required.

Define “change of control,” “cause,” “good reason,” the acceleration amount, and the qualifying period. The labels alone do not establish the result.

Define roles, authority, and a deadlock path

Titles are not operating rules. Use the template to record each founder’s responsibilities, measurable commitments, expected time allocation, compensation, expense limit, hiring authority, contract authority, and ability to bind the company.

Outside activities should be disclosed and evaluated for conflicts, use of company resources, performance impact, and third-party IP obligations. Choose rules that fit the business rather than assuming either a fixed weekly commitment or a blanket prohibition.

A decision-rights table makes authority inspectable:

Decision class	Examples	Decision maker	Threshold
Day-to-day operations	Product priorities within budget, routine vendors	[Founder/role]	[Individual/majority]
Board matters	Annual budget, executive hiring, financing proposals	[Board]	[Threshold]
Shareholder matters	Matters reserved by law or formation documents	[Shareholders]	[Threshold]
Reserved matters	Equity issuance, significant debt, sale, core-IP licence	[Specified body]	[Threshold]

Other reserved matters may include changing founder compensation, materially changing the business, entering related-party transactions, amending formation documents, or committing above a stated spending threshold. Enter the relevant amount and approval level. Unanimity may suit a narrow class of existential decisions, but applying it indiscriminately can obstruct routine action.

Equal ownership is not inherently defective. The risk is an equal vote without a defined route through disagreement. A customizable sequence is:

1. Good-faith negotiation.
2. A short written statement of the issue and proposed alternatives.
3. Mediation.
4. Referral to an independent director or agreed adviser.
5. A counsel-drafted separation or buy-sell process if the deadlock persists.

Specify deadlines, whether third-party input is binding, who controls operations while the dispute continues, and how process costs are allocated.

Inventory and assign intellectual property

For a technical company, “the company owns the code” is not an adequate inventory. Complete a pre-existing-IP schedule for each founder:

Category	Item and owner	Creation or acquisition context	Proposed treatment
Code, model, or algorithm	[Repository/component]	[Date/context]	[Assign/license/exclude]
Data or dataset	[Description/source]	[Date/context]	[Assign/license/exclude]
Domain, design, or documentation	[Item]	[Date/context]	[Assign/license/exclude]
Invention, patent, or application	[Details]	[Date/context]	[Assign/license/exclude]

Add model weights, trademarks, content, hardware designs, and other materials relevant to the product.

Then inventory third-party obligations:

Former employers and applicable invention agreements: [ ]
Current employers and moonlighting restrictions: [ ]
Universities, labs, grants, or sponsors: [ ]
Consulting clients and work-product obligations: [ ]
Licensed technology and usage limits: [ ]
Open-source components, licences, notices, and copyleft review: [ ]
Third-party datasets, APIs, models, or content: [ ]

A properly drafted present assignment is intended to transfer covered rights through the operative agreement. The correct language, covered work, statutory exclusions, and enforceability require jurisdiction-specific review. Filed founder-service agreements illustrate how assignment terms may instead appear in a separate consulting or employment document alongside confidentiality, filing cooperation, and return-of-information duties.

Map each commercial decision to the invention-assignment, employment, consulting, equity, or other agreement that will implement it. Do not assume this worksheet itself transfers any rights.

Plan founder departures and share transfers

Complete the departure matrix before debating “good leaver” or “bad leaver.” Those labels are incomplete unless the triggers, cure rights, economics, deadlines, and treatment of both vested and unvested interests are defined.

Event	Equity treatment	Economics	Decision and process
Voluntary resignation	Vested: [ ]; unvested: [ ]	Right holder and price: [ ]	Notice, deadline, payment, transfer: [ ]
Termination for cause	Vested: [ ]; unvested: [ ]	Right holder and price: [ ]	Cause, cure, decision maker, process: [ ]
Termination without cause	Vested: [ ]; unvested: [ ]	Right holder and price: [ ]	Notice, deadline, payment, transfer: [ ]
Death	Vested: [ ]; unvested: [ ]	Right holder and valuation: [ ]	Estate notice and transfer procedure: [ ]
Disability	Vested: [ ]; unvested: [ ]	Right holder and valuation: [ ]	Definition, decision maker, process: [ ]
Acquisition plus qualifying termination	Acceleration: [ ]; remainder: [ ]	Right holder and price: [ ]	Trigger window, notice, transfer: [ ]

For each event, define the valuation date, appraiser-selection process, exercise deadline, payment schedule, required approvals, and closing mechanics. A clause confiscating vested interests or allowing their repurchase for no cost or nominal value should not be adopted as a default; it requires local corporate, employment, tax, and contract review.

Optional transfer controls include:

• A right of first offer or right of first refusal
• Company, board, or shareholder consent
• Permitted family, estate-planning, or affiliate transfers
• Pre-emption or participation rights on new issuances
• Tag-along or drag-along provisions
• A requirement that incoming holders sign an adherence agreement

For Delaware corporations, Section 202 permits specified written transfer restrictions in the certificate of incorporation, bylaws, or agreements involving security holders. Effectiveness can depend on holder consent and conspicuous notice on certificates or notices for uncertificated shares. A later-adopted restriction may not bind previously issued securities unless the holder agreed to it or voted for it (Delaware Code, Title 8, Section 202).

Complete the related approvals, documents, and tax review

Agreement on commercial terms begins implementation; it does not complete it.

Implementation checklist

• [ ] Obtain required board, manager, member, and shareholder approvals.
• [ ] Have counsel prepare or review the operative founders and equity documents.
• [ ] Execute equity-purchase agreements and related service or IP documents.
• [ ] Issue shares or units under the applicable approvals and documents.
• [ ] Update the cap table and official stock, unit, or ownership ledger.
• [ ] Complete and sign every required schedule and exhibit.
• [ ] Deliver required certificates, uncertificated-share notices, and transfer-restriction notices.
• [ ] Obtain adherence agreements from incoming holders where required.
• [ ] Retain complete signed copies and evidence of approvals.
• [ ] Calendar vesting, repurchase, notice, and tax deadlines.

Map each decision to the implementing record:

Commercial decision	Coordinated document or approval
Entity governance	Certificate or articles; bylaws or operating agreement
Founder equity	Required consent, purchase agreement, capitalization records
Founder services	Employment or consulting agreement
Company ownership of work	Invention and IP assignment
Share transfers	Bylaws, holder agreement, notices, adherence agreement
Vesting and repurchase	Restricted-stock or unit-purchase agreement

A promise of founder equity may remain contingent on board approval and separate purchase documentation. In the EQRx filing, the contemplated share grant was expressly subject to board approval, while its vesting and purchase terms were assigned to a separate restricted-stock purchase agreement (SEC-filed EQRx founder agreement).

For qualifying U.S. restricted stock, an Internal Revenue Code Section 83(b) election may be relevant. The cited U.S.-focused guide describes a 30-day filing period after the grant, but an election does not automatically apply to every option, grant, or founder award. Each founder should obtain qualified tax advice about eligibility, timing, consequences, filing procedure, and proof of filing (founder equity and 83(b) overview).

Final red-flag audit

Stop before execution if the package contains:

• Blank fields or unresolved “TBD” terms
• Percentages that do not match share or unit counts
• Undefined terms used in vesting, cause, or acceleration provisions
• Missing or unsigned schedules
• No treatment for vested interests after departure
• No valuation date, method, expert-selection process, or payment terms
• Repurchase, transfer, or notice rights without deadlines
• IP schedules that omit prior employers, universities, clients, or open-source components
• Terms inconsistent with formation documents, equity documents, or capitalization records
• Equity promises lacking required approvals
• Transfer restrictions lacking required consent or notice
• A tax deadline without a named owner and completion evidence

The practical sequence is three steps: complete the commercial worksheet together; resolve every blank and every scenario in the governance and departure tables; then have qualified local counsel and tax advisers translate the decisions into coordinated corporate, equity, IP, and service documents before anyone signs or equity is issued.

Can founders use this template before the company is incorporated?

Yes—as an unsigned planning worksheet describing intended commercial terms. Identify the proposed entity, jurisdiction, ownership, roles, IP treatment, and formation conditions, and label equity allocations as proposals subject to proper formation and approval.

A binding pre-incorporation agreement is different. Founders considering one should ask local counsel to prepare or review it before signing. After formation, the company may still need entity-specific approvals, equity-purchase documents, governance records, IP assignments, and service agreements.