This is the employment agreement for founders and each founder should sign one ahead of the funding round. It sets out their obligations, director duties, equity vesting schedule and more.
What’s the difference between a Founders Pledge and Founder Service Agreement?
The Founders Pledge is a lightweight version of the Founders Service Agreement - used by idea stage Companies. You should then migrate to a Founders Service Agreement before you start your first funding round.
I’m not planning to raise funding. Do I still need to sign a Founders Service Agreement?
Yes! Many of the clauses present in the agreement are applicable to companies not taking in external investment e.g. roles and responsibilities, protection of the companies interests, confidentiality clauses, and founder restrictions.
I’m a solo founder, do I need a Founders Service Agreement?
Yes! The Founders Service Agreement is there to protect the company as well as the founding team - and investors will expect to see the warranties, IP assignment, and confidentiality clauses present in the Founders Service Agreement.
Should I create a Shareholders Agreement instead of a Founders Service Agreement?
No need to create a Shareholders Agreement until you get to a funding round. And then you will need to create Shareholders Agreement that replicates many of the terms present in your Founders Service Agreement.
Do all founders need to sign a Founders Service Agreement?
Yes! Founders Service Agreements are individual documents and each member of the founding team will need to sign one.
Should all Founders vest their equity?
Yes! Having the founders equity vested will protect the company, and the rest of the founding team, in the event that a founder leaves. It can be the difference between the Company failing and surviving if this happens! And most investors will insist on founder share vesting anyway.
The reality is you’re on a journey; fundraising is so much about the narrative. SeedLegals allows you to tell the right story at the right time with the right legal documents for different types of investors.
Founder & CEO, Yoller
SeedLegals held our hand through complex investor negotiations and even picked up on some errors produced by our previous lawyers which were a well-known City law firm!
Founder & CEO, Qured
One of the great things about SeedLegals is that it is designed to be appropriate for the round and the stage of the business. They keep it simple. It feels like they really understand that.
Co-founder & CEO, Pluto
How do I get all the businesses I invest in to use it?
Angel Investor , The Family
It's easy to forget about the legal side of things but SeedLegals make things really easy to understand. The team at SeedLegals are truly amazing.
There’s an opportunity to reach a specialist advisor via chat, phone and email too to check in on any of this. The SeedLegals team were extremely responsive – really amazing.