Question
Hello,
As previously mentioned, we are in the process of founding a startup company. I would like to know about the provisions I should include into the contract with my co-founders. I have found several points online:
"Who gets what percentage of the company?
Is the percentage ownership subject to vesting based on continued participation in the business?
What are the roles and responsibilities of the founders?
If one founder leaves, does the company or the other founder have the right to buy back that founder’s shares? At what price?"
Besides the mentioned questions, is there anything else that is absolutely essential?
Thank you again
Andrew
Answers: 1 public & 0 private
Just cover the 3D - death, divorce and disaster. What happens if a founder dies/leaves. How is the IP and residual assets split if team wants to go separate ways. And if additional funds are needed, whether selling shares, investing more capital, or personal guarantee over loan who shoulders the risk.
When things go well, they are not needed (clauses in the shareholder's agreement) but it is all about mitigating risks and being uofront to each other. Starting a company is like marriage, or buddies in a foxhole ... you have to figure out the likely risks and resulting contingencies.
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