Now what?

You’ve done enough testing to think you want to work with your co-founder long-term. Now what? While specific legal elements of establishing your company will vary from country to country, some core issues remain universally important.

Legal agreements matter.

Think of a legal agreement, taken after the initial testing period when you have started creating a product and seeing initial traction, as a marriage prenup.  Navigating the path to legalized partnership is a great way to test having difficult conversations with your co-founder and to see how you negotiate with each other and make decisions together. It’s not a sign of distrust to say that you need a legal agreement governing your relationship; it’s a sign of professionalism. You’re about to create an entity together that could become valuable.

With a contract in place from early on, you have a road map for difficult decisions that may come into play later. A written agreement about how the company is governed and how proceeds will be divided provides protection. And it’s much easier to make these agreements when your company is worth nothing versus millions.

While setting your company up, you’ll each need to sign formal legal documents detailing your relationship to your company. These are sometimes called a Founder Agreement or Service Agreement. Cooley and SeedLegals are good places to create these. While The Co-Founder Agreement Checklist can’t replace those documents, it can help you agree in advance the key points you’ll be signing up to.

The Co-Founder Agreement Checklist

To make sure you agree on these issues, we recommend making a copy of this checklist,  completing it, and then signing it with your co-founder. If you can’t agree, you’ll need to figure things out before going further. If you can, you should be able to establish a legal agreement with your partner when setting up your company.

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But legals aren’t everything.

While legal agreements are important, they’re only one part of a successful co-founder relationship. You’ll need to make sure you’re aligned on what you’re trying to accomplish and developing together. Here are some more general questions you can use alongside the checklist, and here is why you should prioritise giving your co-founder feedback.

More resources

Why communication matters for founders.

Your ability to communicate can help or hinder you in every interaction you have. And as a founder, you’re constantly interacting with other people. You must be a good communicator.

How many co-founders should you have?

If you want to start a startup, we recommend finding a co-founder. But then, how many co-founders do you need?

Should you find a co-founder?

Perhaps the first question you have when starting a startup is, should you find a co-founder? After helping thousands of founders start companies, our recommendation is a clear yes.

How to communicate as a founder.

Communication is a critical skill for founders. The best founders are often legendary communicators. Luckily, communication is a skill you can learn.

Should you give your co-founder feedback?

A co-founder relationship is unlike any other relationship you’ll have. Your co-founder is not your friend, your colleague, or your lover. At Entrepreneur First, we have helped thousands of people start companies with complete strangers.

How should you split your company with your co-founder?

When you’re planning to start a company with someone, it’s important you establish the ownership split from the beginning. Dividing the company between co-founders can be a contentious issue.

Why do you need founder equity vesting?

We recommend an equal equity split for co-founders. Many of the problems founders worry about with equal equity split are resolved by having a good vesting schedule.

How do you give your co-founder feedback?

Giving feedback is one of the most important things you can do for your co-founder and for your team. But giving bad feedback can damage relationships, even with the best intentions. So, as a founder, it’s your job to get good at giving feedback, fast.