Startups & Business › Building the Company

Co-founder Agreement

A written agreement on roles, equity, vesting, decisions and what happens if someone leaves.

Also known as: co-founder agreement, founders agreement, founders' agreement

A co-founder agreement writes down what the founders owe each other: who owns what, who decides what, what happens when someone leaves, and who owns the work. Signed while everyone is friends, it turns the future’s hardest conversations into administrative ones — the document decides, so the friendship does not have to.

covers:  equity + vesting │ roles and time commitment │ decision rules
         IP assignment to the company │ leaver terms │ dispute handling

The two clauses that matter most are leaver terms (what the departing keep, at what price the company can buy them out) and IP assignment (everything built belongs to the company from day one, including pre-formation work). Everything else is useful; those two save companies.

The classic mistakes:

• “We’ll paper it after launch.” After launch there is traction to argue about, investors asking for it, and less goodwill. The cheapest time is before anything is worth fighting over.
• Templates signed unread. A generic template with the wrong leaver terms or missing IP assignment is worse than none — it creates confidence without protection. Have a startup lawyer review; it is a small bill against company-ending risk.
• Vague roles. “We’ll both do everything” guarantees dropped balls and duplicated effort. Name domains of ownership (product, tech, sales) even if you both help everywhere.
• No decision rule. 50/50 deadlocks are real. Agree who breaks ties in which domain — or whose call stands when you disagree — before the first deadlock, not during it.

Talk to a notary or lawyer for your case when forming the entity and signing (see incorporation, and PT in Indonesia). The agreement is only as good as its fit to local law.