Founders
Articles on Founders from LegalAgent AI Legal Lab — practical review points, clause-level checks, and AI-assisted legal workflows.
Articles tagged Founders
Articles on Founders from LegalAgent AI Legal Lab — practical review points, clause-level checks, and AI-assisted legal workflows.
Co-Founder Equity Splits and Vesting: Designing Them Together with Buyback Terms on Departure
When a co-founder leaves, who buys their shares, how many and at what price? Decide the vesting terms together with the equity split, and check the company's acquisition procedures and the tax consequences of low-price transfers.
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If You Have M&A in View, Review Founder Shares and Shareholders' Agreements Early
If a departed founder's shares or agreements with past investors remain in place, coordination at the time of a sale can take time. Compare the shareholder register with the agreements and confirm whose consent will be needed.
Read articleRisks Founders Tend to Overlook in SPA Representations and Warranties
Depending on the scope of the representations and warranties, the seller may bear indemnification liability even for past facts it did not know. Read the knowledge and materiality qualifiers, and negotiate them together with the cap and period of indemnification.
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Preferred Share Investment Agreements: The Terms Founders Should Treat as Business Decisions
In a preferred share investment agreement, the distribution in a deemed liquidation and the scope of veto rights affect business decisions after the round. Including preemptive rights and the founders' personal obligations, there are matters worth checking against the business plan and the terms of a future sale.
Read articleA Founders' Agreement Can Only Be Made While the Founders Get Along
How should the shares of a departing founder be handled? Once the relationship has soured, it becomes hard to agree on the purchase price and terms, so it is important to discuss these matters while trust still exists. Non-competition and decision-making rules are also decided in light of the interests of both the company and the individual.
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