What is a Founders’ Agreement? | The Clueless Founder | Startups | splainer

Welcome to our new series titled ‘The Clueless Founder’. A new founder’s life is both exciting and very complicated–and we’re all a little bit clueless. You’ve gotta figure out how to build, scale, raise paisa, make paisa, hire the right people, find the right partners–all at the same time. So we’re going to take a deep breath and break it down one episode at a time. Think of it as a no-BS, real-life guide for any founder who is just starting out. In this first episode, Lakshmi Chaudhry (Splainer Founder) and Chitra Raghavan (Partner, Rajaram Legal) discuss the one document that both causes the most drama—and also saves you from the ugliest drama. And that’s the Founder’s Agreement. It's the startup equivalent of the shaadi prenup. Very icky and very necessary. Production - Multibox Entertainment Conceptualised by Lakshmi Chaudhry and Geeth Vaz Get a free two-week pass to Splainer with this link: https://splainer.in/subscribe Sign up for Splainer Lite—our free daily edition on Substack: https://splainerlite.substack.com/ #Founders #Startups #FoundersAgreement #Prenup #TheCluelessFounder 01:11 - Introduction 02:35 - Chapter 1: What is a founder's agreement? 04:22 - Chapter 2: At what point in the lifecycle of the company does a founder's agreement occur? 05:30 - Chapter 3: What is the template of a founder's agreement? 06:43 - Chapter 4: How does one define the roles and responsibilities in a founder's agreement? 08:13 - Chapter 5: What does revisiting and expiry mean for the founder's agreement? 11:00 - Chapter 6: How do we structure and define equity for the company? 12:15 - Chapter 7: Why is the 50-50 equity split when roles are not clearly defined not a good idea? 15:35 - Chapter 8: What is typically the equity split for someone to be in the driver's seat? 19:05 - Chapter 9: Outlining big roles/responsibilities in a founder's agreement to avoid disputes 22:50 - Chapter 10: Difference between an employment contract and a founder's agreement 27:55 - Chapter 11: What must a founder's agreement cover? 28:40 - Chapter 12: Enforceability of non-compete clauses 31:35 - Chapter 13: Resolving an impasse/deadlock 39:32 - Chapter 14: Importance of mediation as a dispute resolution mechanism 42:47 - Chapter 15: What are some of the major reasons for such disputes? 52:00 - Chapter 16: What is an investor's agreement and how is it different? 53:55 - Chapter 17: What to look out for in the next episode 54:20 - Chapter 18: Subscribe to Splainer