S1, Episode 6: Founders’ Agreements

Season One, Episode Six– An overview of the benefits of founders’ agreements and the critical need for honest conversations between co-founders at the onset of any business venture.

Episode Description: Jared Arcari (Fordham Law ‘19) and  Blessing Adeyeye (Fordham Law ‘18) join to discuss three main aspects of founders’ agreements: ownership rights of the entity and its accompanying intellectual property, management responsibilities, and confidentiality issues between co-founders.

Episode Roadmap:

  • [:37] Jared Arcari introduces himself and Blessing Adeyeye as Fordham Law students under the direction of Professor Bernice Grant.
  • [2:04] Arcari explains why a founders’ agreement is an essential first step to co-founding a business, using Facebook as a cautionary example of what not to do.
  • [5:31] Adeyeye highlights the benefits of having ownership, management, and confidentiality conversations early on.
  • [8:16] An explanation of equity allocation in exchange for consideration provided by each co-founder.
  • [10:58] The benefit of having a vesting schedule and intellectual property protection from the inception of the company.
  • [14:25] Management aspects of founders’ agreements, including responsibilities of each co-founder, compensation, and decision-making terms.
  • [18:34] Advantages of creating confidentiality provisions and non-disclosure agreements.
  • [22:20] Adeyeye summarizes the key aspects of founders’ agreements.

Tweetables:

“Founders’ agreements clear the air from the beginning of the business venture before issues arise later on.” -Jared Arcari
“A founders’ agreement should plainly lay out the responsibilities of the co-founders and how they will continue to support... the venture.” -Jared Arcari
“It is much more efficient to delegate responsibilities now, rather than wait for a decision to become a major issue down the road.” -Blessing Adeyeye

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Startup LAWnchpad is a new podcast that helps bridge the gap between entrepreneurs and their legal needs.  This podcast is a series of virtual legal workshops that will educate entrepreneurs about legal issues they commonly face as they develop, launch and grow their business.