When a group of entrepreneurs go into business together, one of the first things they should do is consider drafting a Founders’ Agreement.
While a Founders’ Agreement is not always legally binding, it does provide some protection to founders who later find themselves at odds with one another. The agreement is documentation that you were once on the same page as your cofounder(s).
The Founders’ Agreement serves as a basic understanding of what a group of founders expect to happen as they develop their company.
What is included in a Founders’ Agreement? It can include:
– Expected salaries
– A statement about the future direction of the company
– A prospective business plan
– Roles and responsibilities of each team member
That last point can be one of the most important matters to get in writing. Otherwise, the founders run the risk of future disagreements whenever someone claim that other team members either did not do their part or overstepped their bounds.