Founders' Agreement Template

When to use this template

Sign this before incorporation or in the first weeks. The most expensive mistake startups make is launching without one. When a co-founder walks at month 14 with 33% of the cap table, the entire company is held hostage.

How to fill it in

1. All founders sign — the agreement binds all of them. Add new founders via amendment, not a side letter.
2. Vesting schedule: standard is 4 years with a 1-year cliff. Day-zero shares should be subject to vesting unless founders have already invested significant capital.
3. IP assignment: any code, designs, trademarks, or know-how created before incorporation should be formally assigned to the company on incorporation day.
4. Decision-making: define what needs unanimous consent (raising capital, selling the company, hiring/firing co-founders) versus simple majority.
5. Exit triggers: define 'good leaver' vs 'bad leaver' — a bad leaver typically forfeits unvested shares and the company has the right to repurchase vested shares at par or fair value.

Frequently asked questions

Is a founders' agreement legally binding without lawyers?

Yes — Singapore contract law respects mutual agreement, consideration, and signatures. But for a Series A or later round, investors will want a properly drafted shareholders' agreement to supersede this. Treat this template as a starting point.

What if we already incorporated without one?

Sign one now. It's better to have it after incorporation than never. Implement vesting retroactively if you have not already issued certificates — though this requires careful tax structuring with IRAS.

How do we handle a co-founder who wants to leave?

If you have a vesting schedule, only the vested portion stays with them; the rest reverts to the company. Without vesting, the departing founder keeps their full equity and the remaining team carries the load — the worst possible outcome.