Co-Founder Contract
THIS CO-FOUNDER CONTRACT (the "Contract") made and entered into this (the "Effective Date"), by and between [Co-Founder 1 Name], currently residing at [Co-Founder 1 Address], and [Co-Founder 2 Name], currently residing at [Co-Founder 2 Address].
1. Formation of Business
The Business will take an active role in supplying a service that involves the provision of specialized software. This company of ours, known as [Your Company Name], will be particularly focused on smoothing the road for small-scale business operations, especially in the realm of inventory management. Our goal is to simplify and streamline the operational processes of these businesses, alleviating their day-to-day managerial stress and allowing for a greater focus on growth and profitability.
2. Roles and Responsibilities
a. Co-Founder 1 shall be responsible for overseeing the technical development and product design aspects of the business.
b. Co-Founder 2 shall be responsible for managing the business operations, including marketing, sales, and customer relations.
3. Equity Ownership
The division of equity ownership in the Business is to be split equally amongst its two co-founders. Accordingly, fifty percent of the ownership equity shall be assigned to the first co-founder while the remaining fifty percent shall be allocated to the second co-founder.
4. Decision-Making
Decisions regarding the operation and management of the Business shall be made jointly by the Co-Founders. In the event of a disagreement, the Co-Founders shall work towards reaching a mutually agreeable solution.
5. Financial Contributions
Each Co-Founder shall contribute financial resources to the Business as follows:
Co-Founder 1 Contributions:
Co-Founder 1 shall contribute an initial investment of $XX, XXX to cover startup costs and operational expenses.
Co-Founder 2 Contributions:
Co-Founder 2 shall contribute expertise in marketing and branding strategies, valued at $XX, XXX, and shall also contribute an additional $XX, XXX in cash for initial marketing campaigns.
6. Compensation
a. Co-founders shall not receive a salary from the Business until the Business generates sufficient revenue to support regular compensation.
b. Any profits generated by the Business shall be reinvested in the Business or distributed as agreed upon by the Co-Founders.
7. Vesting Schedule
The equity ownership for each Co-Founder will be a process that continues or vests over 4 years. This process will follow a standard structure where the first full year, known as a one-year cliff, has to pass before any equity ownership comes into effect. Following this initial year, the process of vesting will be every month.
8. Confidentiality and Non-compete
a. Co-founders shall maintain the confidentiality of all proprietary information belonging to the Business.
b. Co-Founders agree not to engage in any competitive activities that could harm the Business during the term of this Contract and for a period of [Duration] after its termination.
9. Intellectual Property
Any intellectual property that is produced, developed, or contributed by the individuals who Co-Founded this business is duly considered as an asset that is co-owned by the business. This includes elements of intellectual property that are either created from scratch by the Co-Founders or any pieces of intellectual property that they may contribute to the business from their capacities.
10. Termination and Exit
In case of contract termination, the Co-Founders will negotiate in good faith for an amicable agreement on the disposition of their interests. This may include a buyout at fair market value by one Co-Founder. If no mutual agreement is reached, mediation or arbitration per Section.
11. Dispute Resolution
If mediation or arbitration is necessary, the process will be conducted in [City, State], and the selected mediator or arbitrator shall be mutually agreed upon by both Co-Founders. Each Co-Founder shall bear the costs associated with mediation or arbitration. The decision of the mediator or arbitrator shall be final and binding on both parties.
12. Governing Law
The jurisdiction and interpretation of this Contract shall be carried out strictly by the laws and legal systems in place in [Jurisdiction].
IN WITNESS WHEREOF, the parties hereunto set their hands and seals as of the Effective Date.
[Co-Founder 1 Name]
[Date Signed]
[Co-Founder 2 Name]
[Date Signed]
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