What Questions Should a Founder's Agreement Answer?
How Will Profits and Losses Be Shared? The agreement should specify how profits and losses will be distributed among the founders. This includes salaries, bonuses, and dividends.
What Happens if a Founder Leaves? Detail the process for a founder's departure. This includes the transfer or buyback of their shares, any financial settlements, and the impact on their equity.
How Will New Investors Be Handled? Specify how new investors will be brought on board and how this will affect the existing equity structure. Include provisions for dilution of shares and voting rights.
What is the Exit Strategy? Outline the exit strategy for the founders. This includes potential scenarios like selling the company, merging with another company, or going public.