A cofounder agreement is not a bureaucratic formality — it's the document that defines what happens when things don't go according to plan. Most founding teams skip it because they trust each other and don't want to imagine conflict. The teams that have documented everything are the ones who can resolve disputes quickly and keep building.
Everything corporate in one place — no spreadsheets.
Set up your company's cap table in minutes.
Everything corporate in one place — no spreadsheets.
Set up your company's cap table in minutes.
Every cofounder agreement must address: the initial equity split and how it was calculated; vesting schedule for all founders including cliff and acceleration provisions; the buyback right — the company's right to repurchase unvested shares upon departure; good leaver vs. bad leaver definitions and the different equity outcomes for each; and the reserved pool size and who controls grants from it.
IP assignment is technically separate from equity but directly connected. If a cofounder built significant technology before incorporation and that IP isn't formally assigned to the company, the company doesn't legally own its own product — a due diligence blocker for every investor. The cofounder agreement (or a separate IP assignment agreement) should transfer all relevant IP to the company, and the equity granted to that founder should reflect the value of that contribution.
Unassigned IP means the company doesn't own its own product
If a cofounder built significant technology before incorporation and it was never formally assigned, that's a due diligence blocker for every investor. The cofounder agreement — or a separate IP assignment — has to transfer it.
The agreement should specify who has authority over which categories of decisions, what quorum is required for major decisions, and how deadlocks are resolved. For two-founder companies, a tie-breaking mechanism is essential. For three-founder companies, majority voting rules are simpler but should still be documented. Equafy provides the tracking layer — recording every equity event with a timestamp and description — but the cofounder agreement is the legal foundation that gives those events meaning.
The agreement writes the rules, the cap table keeps the score
Two-founder companies need an explicit tie-breaking mechanism; three-founder companies can rely on majority voting but should still document it. Equafy records every equity event with a timestamp and description so the agreement's terms have a matching ledger.
No, but operating without one is a significant risk. In the absence of a documented agreement, default company law applies — which rarely matches what founders actually intended.
Templates are useful starting points, but cofounder agreements have jurisdiction-specific requirements. Have a startup lawyer review and adapt any template before signing.
The agreement defines the rules; the cap table implements them. The equity percentages, vesting schedules, and reserved pool in the agreement should match exactly what is recorded in the cap table tool. Equafy maintains the cap table layer consistently with whatever structure the agreement defines.
Equafy maintains the live cap table that makes your cofounder agreement real — tracking equity, vesting, and every change with a full audit trail.
Get Started Free