A Start-up Agreement, also known as a Founders’ Agreement, is a legal document that outlines the roles, responsibilities, rights, and relationships among the founders of a new business venture. This contract serves as a foundational tool for establishing clear guidelines and expectations to manage and operate the start-up effectively.

The Agreement is a formal written contract among the founders of a new business that delineates the roles, responsibilities, financial commitments, and equity distribution among the participants. This agreement serves as a preemptive framework for governance and operational strategies, detailing mechanisms for decision-making, conflict resolution, and adjustments to ownership structure as the business evolves. It aims to preemptively manage expectations and provide clear directives on how critical issues like resource contributions, profit sharing, and potential disputes should be addressed, thereby safeguarding the interests of all parties involved and promoting the sustainability of the business venture.

The Start-up Agreement mitigates risks, prevents misunderstandings, and ensures that all founders are aligned on the business vision and operational strategies. This legal foundation is crucial for maintaining a stable and clear direction as the company grows and faces new challenges.