A founders agreement is the document that decides what happens to your company when things don't go to plan — before they go wrong, while everyone is still aligned. Most teams skip it because they trust each other; the teams that write it down are the ones who survive the hard conversations. This is a complete guide to what a founders agreement should cover, with links to a deeper guide on each piece.
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A founders agreement (sometimes a cofounder agreement) is the written contract between the people starting a company. It records the deal you've made with each other: who owns what, how ownership is earned and protected over time, who decides what, and what happens if someone leaves. It isn't the same as your incorporation documents — it's the human agreement underneath them, and it's what prevents "we'll figure it out later" from becoming a lawsuit.
The heart of the agreement is the equity split and the reasoning behind it. Document not just the percentages but how you arrived at them — idea, capital, time commitment, prior work — so the split is defensible later. If commitments are unequal or still changing, consider a dynamic model that earns equity from real contribution rather than freezing a guess on day one. Our guide on how to split equity between cofounders walks through the frameworks.
Vesting is what stops a cofounder from walking away in month three with a big chunk of the company. A standard schedule is four years with a one-year cliff, so equity is earned over time rather than owned outright from day one. Every founders agreement should specify the vesting schedule, cliff, and any acceleration on acquisition. See our detailed guide to the founder vesting schedule for the mechanics.
The clauses you hope never to use are the most important ones. Define good leaver vs. bad leaver outcomes, the company's right to buy back unvested (and sometimes vested) shares, and how a departing cofounder's equity is treated. Two of our guides go deep here: what happens to equity when a cofounder leaves, and how to bring on an equity-holding late cofounder without breaking the existing split.
Finally, the agreement should define roles and decision rights (who has authority over what, how deadlocks break), and — critically — IP assignment. If a cofounder built technology before incorporation and it isn't formally assigned to the company, the company doesn't legally own its own product, which is a due-diligence blocker for every investor. Assign all relevant IP to the company in writing.
Use this as the minimum your founders agreement should cover before anyone signs. Each item links to a deeper guide where relevant — treat this page as the hub and the guides as the detail.
The agreement sets the rules — the cap table keeps the score
Equafy maintains the live cap table that makes your founders agreement real: it records the equity split, tracks vesting, and logs every change with a full audit trail — so what's written and what's true never drift apart.
At a minimum: the equity split and its rationale, a vesting schedule with a cliff, good leaver / bad leaver definitions and buyback rights, how late cofounders can be granted equity, roles and decision rights with a tie-breaker, full IP assignment to the company, and the reserved pool size.
No, but operating without one is a serious risk. Without a documented agreement, default company law applies when a dispute arises — and it rarely matches what the founders actually intended.
They're essentially the same document under different names — the written deal between the people starting a company covering equity, vesting, departures, roles and IP. Our cofounder agreement template guide covers the equity clauses in detail.
The agreement defines the rules; the cap table implements them. The percentages, vesting schedules and reserved pool in the agreement should match exactly what's recorded in your cap table. Equafy keeps the cap table consistent with whatever your agreement defines.
Equafy maintains the live cap table behind your founders agreement — the equity split, vesting and every change, with a full audit trail.
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