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An Introduction to Founders’ Agreements on Clara
An Introduction to Founders’ Agreements on Clara
Updated over a week ago

What is a Founders’ Agreement?

A Founders’ Agreement sets out key details of your founders’ roles, contributions, and equity (including vesting arrangements).

Why generate this document?

Generate a Founders’ Agreement to clearly set out the equity split, roles, responsibilities and expectations, and help avoid potential disputes further down the line. Having this document in place also ensures that the founders’ equity is subject to vesting, avoiding any issues with founders unfairly keeping all their shares if they leave prior to making their full contribution.

What does a Clara Founders’ Agreement do? 

  • Clarifies founders’ roles and responsibilities.

  • Sets out decision-making processes at board and shareholder level (including director appointment rights and which key decisions require the approval of all founders).

  • Allocates equity between the founders and lays out vesting arrangements for the founders' shares.

  • Includes customary share transfer restrictions, including a right of first refusal for any transfer of existing shares and pre-emption rights on the issuance of new shares (i.e. every founder has the right to buy shares being sold by any other founder and the opportunity to purchase additional shares in any future issue of shares).

  • Gets vesting arrangements in place. Many (including the operators of accelerator programmes) require this to proceed with investment.

  • Is governed under English law with a dispute resolution mechanism using expedited ICC arbitration procedures to be held in a place you can select in the form.

Additional info

  • Although founder roles and responsibilities are covered, the exact services provided by founders (e.g. business development) are not.

  • Non-compete provisions and provisions relating to the transfer of intellectual property rights from the founder to your startup are not included in this document – you’ll need to generate separate agreements to put these in place.

  • This agreement won’t cover any founders who join your startup after it’s been signed. Before registering as shareholders, they’ll need to sign a deed of adherence to the Founders' Agreement instead.

  • This agreement can be used either before or after incorporating a topco.

Clara recommends...

  • Generating a Founder Services Agreement, to outline the services each founder will provide to your startup’s holding company.

  • Generating Non-Compete Agreements (to prevent founders from engaging in competing activities while working with your startup, and for a period of time after they leave).

  • Generating Intellectual Property Assignment Agreements for your startup's topco to enter into with each founder.

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