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Founders Agreement
I need a founders agreement for a startup with two co-founders, outlining equity distribution, roles and responsibilities, decision-making processes, and a vesting schedule with a 1-year cliff and 4-year total vesting period. The agreement should also include provisions for resolving disputes and handling the departure of a founder.
What is a Founders Agreement?
A Founders Agreement is a formal contract that startup co-founders sign to establish clear rules for their business relationship. It spells out vital details like ownership percentages, roles and responsibilities, and what happens if someone leaves the company - issues that are especially important under Dutch corporate law.
This binding document typically covers intellectual property rights, decision-making processes, and profit sharing arrangements. Dutch startups often include specific clauses about arbeidsrecht (employment law) compliance and aandeelhoudersovereenkomst (shareholder agreement) terms. Making these arrangements official early helps prevent costly disputes and provides a solid foundation for growth.
When should you use a Founders Agreement?
Create a Founders Agreement right when you start building your venture together - ideally before registering your Dutch BV (private limited company). This early clarity prevents misunderstandings about crucial issues like equity splits, voting rights, and exit procedures when everyone is still aligned and optimistic.
The agreement becomes especially valuable during major business changes: bringing in new co-founders, starting serious fundraising, or when someone wants to leave. Dutch law gives considerable freedom in structuring these arrangements, but having them documented upfront helps avoid costly legal battles and protects your intellectual property rights from day one.
What are the different types of Founders Agreement?
- Co Founder Agreement: Core version covering basic partnership terms, equity splits, and management rights
- Founder Employment Agreement: Focuses on founder roles as both owners and employees, including salary and benefits
- Startup Shareholders Agreement: Detailed version for ventures planning external investment rounds
- Startup Equity Agreement: Specialized for vesting schedules and equity distribution mechanics
- Co Founder Exit Agreement: Outlines terms and procedures for founder departures and share transfers
Who should typically use a Founders Agreement?
- Co-Founders: Primary parties who sign and are bound by the Founders Agreement, typically including technical founders, business developers, and initial team members
- Legal Advisors: Dutch corporate lawyers who draft and review the agreement to ensure compliance with local business law
- Startup Accelerators: Often require standardized Founders Agreements before accepting companies into their programs
- Board Members: May need to approve and implement governance structures outlined in the agreement
- Investors: Review these agreements during due diligence to understand founding team dynamics and ownership structure
How do you write a Founders Agreement?
- Business Details: Gather company registration info, planned legal structure (BV/NV), and business activities
- Ownership Structure: Document each founder's equity stake, initial capital contributions, and vesting schedules
- Roles Definition: List each founder's responsibilities, time commitments, and decision-making authority
- IP Arrangements: Identify existing and future intellectual property rights and their allocation
- Exit Planning: Define procedures for share transfers, founder departures, and company sale scenarios
- Platform Usage: Use our automated system to generate a legally compliant agreement that includes all these elements
What should be included in a Founders Agreement?
- Party Details: Full legal names, addresses, and KvK numbers of all founders and the company
- Equity Structure: Precise share distribution, types of shares, and vesting conditions under Dutch law
- Management Rights: Decision-making processes, voting thresholds, and board composition
- IP Assignment: Clear transfer of intellectual property rights to the company
- Non-Compete: Reasonable restrictions following Dutch competition law guidelines
- Exit Provisions: Share transfer rules, tag-along/drag-along rights, and dissolution procedures
- Dispute Resolution: Dutch court jurisdiction and applicable law clauses
What's the difference between a Founders Agreement and a Business Acquisition Agreement?
A Founders Agreement differs significantly from a Business Acquisition Agreement in several key ways, though both are crucial documents in Dutch corporate law. While Founders Agreements establish the initial relationship between co-founders, Business Acquisition Agreements govern the purchase and sale of an existing business.
- Timing and Purpose: Founders Agreements come first, setting up new ventures from scratch, while Business Acquisition Agreements transfer ownership of established companies
- Parties Involved: Founders Agreements bind co-founders working together, while Business Acquisition Agreements involve buyers and sellers as separate entities
- Scope of Coverage: Founders Agreements focus on ongoing relationships, roles, and equity distribution; Business Acquisition Agreements detail one-time transactions, asset transfers, and liability assumptions
- Duration: Founders Agreements remain active throughout the company's lifecycle, while Business Acquisition Agreements typically conclude after the transaction closes
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