I'm a co-founder of a Delaware corporation being asked to sign founding documents. The structure gives one co-founder sole board control while treating the other co-founders as at-will employees with no protection. We must assign all past IP immediately but shares don't vest for 6 months, meaning we could be fired tomorrow and lose everything after giving up our IP. Is this normal for co-founder agreements, and what protections should I demand before signing? This is urgent as we're supposed to sign soon.
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I’m unsure what the next steps are I was expecting a proposal or anything…but I paid a fee to join the platform and now I have to pay another fee but I don’t know what the fee is for…another fee for you reading my message or? Sorry I’m very confused.
Hello! My name is Dolan and thank you so much for contacting me! I just had a few quick questions for you: To clarify, what percentage of shares will you have? Are there voting procedures at all?
Hi Dolan, thanks for the quick response (sorry for my confused message earlier, a customer support agent explained to me how things work.) Here's a bit more information about the project (I used AI to summarize it) Here's a project description for the lawyer platform: Company Structure: We're three co-founders. The proposed equity split is 42.1% for one co-founder (who would be CEO), 40.3% for me, and 17.6% for our third co-founder (CTO). Voting rights would match ownership percentages. Vesting: Everything vests over 4 years with a 6-month cliff. Two of us have standard monthly vesting after the cliff, while the CTO has performance-based quarterly vesting. Current Structure: The co-founder with the highest equity (42.1%) gets the sole board seat and CEO position, giving them all decision-making control. The other two co-founders are structured as at-will employees with no operational control. All co-founders must assign past IP immediately upon signing, but no equity vests for 6 months.
Thanks so much! This does seem a little bit lopsided it makes sense that a person would have the voting rights based on their equity split comma but the fact that one person gets a sold board seat and the ceo position and really gives them oversized control. It's also a little bit confusing, it looks like the company structure has people voting based on their equity, but there is a board seat, giving someone total control. So if I'm mistaken, it's possible that if you and the CTO vote together you can outweigh the other party's vote; however, if they have the sole board seat, then that would create a bit of a problem. My recommendation would be to just make voting based on percentage. I think that all of you should be a board member. Basically, the way that this works is because you have 40.3% and the other person has 42.1%, this gives me CTO, even though they do not have a lot of value in a company comparatively, it makes their vote extremely important. As a bonus tip: I would also consider what happens in the event of a tie .