Today we’re launching version 2.0 of the Seedhack Founder’s Collaboration Agreement (download here in .DOC or in .PDF). We’ve made a couple of adjustments to the previous version that we hope will further make this document a solid tool to help launch an informal collaborating team into a formal company.
One thing we’ve added is a Vesting Schedule to the existing reverse vesting clause. We’ve had a few questions on what this should look like (a simple table can suffice) and so offer up a template to help get collaborators started.
Reverse vesting in general and bad leaver/good leaver clauses in particular are topics we get asked about a lot by entrepreneurs.
In basic terms, reverse vesting aligns the amount of time a founder puts into a company with the amount of equity that founder can walk away with at certain date by holding the founder’s shares in escrow and releasing them over time, typically over three to four years.
In the beginning, when an idea is fresh and a team is quickly gaining momentum, reverse vesting may seem unfair or irrelevant. But a number of circumstances may arise down the road that can shake up a founding team. For example, a founder may need to take a break from the entrepreneurial lifestyle to pursue more regular employment due to cash needs. Or a founder might decide to focus on a different startup – a particularly common occurrence after events like hackathons where talent and ideas are essentially speed dating and a founder may face multiple startup opportunities. Or, simply, the founders might just not get along and decide to move on. Whatever the reason, founders do sometimes need to leave and when this happens, reverse vesting all of a sudden is a very useful and fair tool.
For a good primer and additional reading on reverse vesting, the benefits to founders to include vesting from the start, and what to expect down the road, check out this post by Dave Broadwin via Simeon Simeonov’s blog, or this one by Dan Shapiro. Also check out Fred Destin’s presentation at Seedcamp Ljubljana on the Startup Lifecycle for more information on how reverse vesting is founder friendly, as well as other great insights for budding startups.
We’ve also included in version 2.0 a broad non-compete clause. The intent here is to protect the startup by preventing the development of a competing technology by one or more collaborators should they decide not to move forward with the team. A thank you to Phil Weiss for this language.
Another big thank you to Tina Baker from Brown Rudnick for drafting the original agreement.
Hackathons and other organizations that currently support the use of this document include:
Usage of this document:
The spirit of the doc remains the same – a starting point for discussion – and can be used as is or modified to suit the founding team’s needs.
Thanks again for all your comments on version 1 and we look forward to hearing your thoughts on v2.0.
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