Business Law · California
Founders Agreement for California
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What is a Founders Agreement?
A Founders Agreement is the contract between co-founders of a startup. It locks in equity splits, vesting schedules, roles and responsibilities, IP assignment, decision rights, and the rules for a founder leaving.
Who needs one in California?
Any two-or-more co-founders. Even if you're best friends today, the agreement is what protects you if one of you leaves, gets sick, or simply checks out.
What a California Founders Agreement must cover
- Equity splits and capital contributions
- Vesting schedule (typically 4 years with a 1-year cliff) and acceleration triggers
- IP assignment from each founder to the company
- Roles, titles, and decision-making authority
- Founder departure mechanics — voluntary, for-cause, without-cause
- Buyback rights on unvested equity
- Confidentiality and non-solicit consistent with California law
Why attorney review matters in California
The most painful startup disputes come from missing or vague founder agreements — a founder leaving with 40% of the equity vested zero, a co-founder claiming they own IP you built, an investor walking when the cap table doesn't match the story. A licensed attorney makes sure your vesting, IP, and departure terms are enforceable under California law and won't blow up at a fundraise.
California-specific note
California applies the strict ABC test for worker classification, has the country's most aggressive consumer-privacy regime (CPRA), and voids most non-compete clauses outright. Standard out-of-state templates almost always need rewrites here.
Ready to draft your California Founders Agreement?
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FAQ
Do I really need vesting if it's just me and a co-founder?
Yes — especially then. Without vesting, a co-founder who quits in month three keeps their full equity stake. Vesting is what makes that fair.
Can we sign this before we incorporate?
You can, and you should. The Founders Agreement is a contract between you; the equity is then issued by the company once it's formed.