Agreement between founders

It is common for initial members of a venture to change and rare for remaining members to stay in the same company long term even if the founders got along well in the beginning.

Considering such observations, current founders and joining founders might adopt a reverse vesting clause which protects the remaining founders and the company itself from joining founders leaving newly funded startups with their shares.

For example, such a clause might mean that if the joining founder loses his/her position as an officer or employee, his/her shares shall be transferred to the current founder.

The price of the transfer shall be the same as the purchase price paid unless there has been some reorganization of shares (e.g. merger, division or issue) in the meantime.

You might also need to consider preventing joining founders from transferring shares to others unless he obtains consent from the current founder.

It is also wise to consider succession as this is one variation in which new shareholders might join. While hoping for the best, we should prepare for the worst and not proceed on the basis that the friendship and collaboration between founders will last forever. As such, it is important to prepare for conflict among the founders at the outset.

If joining founders are also contributing patents, copyrights or other property essential for the company, it would be good to transfer ownership of such property to the company before any problems arise.

Please note that current founders shall issue many shares before any one joins the company in light of VC and joining partners, as founders need to have controlling power.

With regards to all of the above elements, I would recommend that you consult with experts as the details of such clauses can be quite complex yet very important.

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