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Avoiding legal pain in startups

We are continuing to describe how to make a proper Founders agreement using, as an example, agreement that we’ve prepared and signed in Staply. If you just joined us, this is a series of articles for startup founders, who wish to implement a basic legal protection for their startup. I know very few startups, that had any legal protection, especially on the initial stages of the company. If you don’t want to do any kind of legal activities without a lawyer, these articles can be used as a prep material for the discussion with a lawyer or attorney.

In the previous parts of the Founders Agreement line-by-line guide I’ve described preamble part and started to describe the agreement part. I’ve already covered topics related to responsibilities of the CEO (Chief Executive Officer), COO (Chief Operating Officer), making amendments to the agreement and intellectual property.

In this article...

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Complete DIY guide: Founders Agreement part 3: Intellectual Property

This is a third part of our line by line description of the Founders Agreement, that we’ve signed at Staply between Greg and me. Previously, I’ve describe the preamble part and first 3 clauses of the Agreement part: Responsibilities of the Founders, CEO’s responsibilities and COO’s responsibilities.

All clauses after the 3rd one (4-11) are so-called general things, not generally related to the Founders agreement. For example, in this article I’ll describe how the amendments can be done to the Founders agreement and where all the intellectual property should be stored. As you can see, these topics are important, but do not refer to the founders and their responsibilities. Basically, part, that corresponds to the founders responsibilities, is covered in the preamble and clauses 1-3.
The document, that I describe, is available here.

Amendments to the Agreement

In my opinion, one of the...

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How to Prepare a Founders Agreement part 2

This is a second part of my article where I explain in simple words how to prepare a Founders Agreement. In the previous part I’ve shared our own Founders Agreement, that we’ve signed in Staply. That agreement is used as an example in this part as well. If you missed it out, please find it here. Now I’m going to continue to the next parts of the Founders agreement.

Agreement Part

Agreement part starts in the Agreement section with the following preamble:

“NOW, THEREFORE, in consideration of the above representations and understandings…”

Basically, it means, that “understandings” mentioned in the Recitals section are considered before creating and signing the Founders Agreement.

As I’ve mentioned before the main purpose of Rectails section is to describe the main points on which all Founders had agreed. So here I made a reference to it. If some statements or clauses of the...

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How to Prepare a Founders Agreement

Hi guys. Sorry for the delay. We were working hard on the beta version of Staply that we plan to launch really, really soon. But luckily now i have some time to write the next part of our DIY guide of legal basics for startups. In this article I will describe the first 2 sections of the Founders Agreement, Header and Recitals.

Also, as i promised, I will share our own Founders Agreement signed by Greg and me before we started working on Staply. We are sharing this agreement with you as a public domain work, so you can use it completely for free.

You can download the agreement here.

Header section

Ok, let’s start. The first thing you typically see in the agreement is the section where parties are described. It starts with

“This Founders Agreement (“Agreement”)”

I’ve inserted brackets to shorten the title of the agreement. That will come in handy when i will refer to it. It is not...

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Complete DIY guide: legal basics for startups, COO responsibilities

Founders Agreement. The right hand

In the first article of the complete DIY guide we’ve discussed how to write the Founders Agreement and more particularly the part that describes the CEO’s responsibilities. There I provided some theoretical background and showed the quotes from the Founders Agreement, that we’ve signed at Staply.

Today i will show you how to include COO (Chief Operating Officer) responsibilities in the Founders Agreement. From my point of view, COO responsibilities are different in comparison to those of the CEO. Since many startups have at least 2 founders and both of them can’t be the CEO, i think it will be quite useful for the startup community.

There will be one more article in the sub-series of posts related to the Founders Agreement. There I will share our own (Staply) agreement that was signed by Greg and me. It will be available for you, for free...

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Complete DIY guide: legal basics for startups (Part 2)

Hello guys! Our blog where we published our first article few days ago (Founders agreement. CEO Responsibilities) had about 16600 unique visitors and something close to 49000 page views. Thanks a lot for your support, it really motivates us to write :) If you haven’t already read the first article, I would highly recommend to do so before reading this one.

This article was inspired by a comment from a person with the nickname “lukasm” on Hacker News. Lukasm asked: “How to avoid rookie mistakes like Zuckerberg’s with vesting?”. Vesting is obviously a very important thing. However, before discussing it, in my opinion, we need to discuss shareholders clauses first, because they set the rules regarding shares at the first place. So, this article will first describe how to prepare and write shareholders clauses and then i will explain vesting and show how we did it at Staply.



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Complete DIY guide: legal basics for startups

Startup founders are certainly great at design/engineering/sales etc. However when it comes to a legal part it turns out that they know almost nothing. Therefore, it is not surprising that a huge number of legal mistakes is made, especially in the early days of the companies.

That is why I’ve decided to start a series of articles that will help non-lawyers to establish and to maintain a basic legal part of their startups. From my experience, legal mistakes can be easily avoided and you don’t need lots of money to do that. Of course there are quite a lot of articles about that, but personally i don’t like them. Most of them are overly complicated, not structured and lack clear guidelines.

Please note that I’m not trying to sell you any legal services. I will simply describe basics of the legal part of IT startups (both software and hardware). Those basics, from my point of view, will...

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