Need of Founders Agreemnt
In today’s time, every year lots of people are entering into the world of entrepreneurship. Many come because they have some strong ideas and some come as its a very lucrative and fascinating thing. Those who are entrepreneurs, they know the white and black of being an entrepreneur. Being an startup founder myself right after the college, we have faced lot of challenges. A major question arises about Founders agreement. It should be there or not. If yes then when and many other things. A few days back, I along with other startup founders shared our views in an interview with with Times of India and sent the message to upcoming startup founders to think about this crucial thing which we keep aside in the flow of making the product and getting the clients.
Below are few points which we discussed and I would like others to put your thoughts and experiences to help the others.
1) Equity related: Determining the extent of ownership; ESOPs; lock in period; exit of a co-founder – how should his shares be dealt with – purchase by other founders etc?
2) Determination of designations, roles and responsibilities
3) Non-compete clause
4) Deadlock clause – use of mediation/arbitration
5) Exit provisions