What are the essential ingredients of startup legal documents?
In developing a streamlined, cost-effective set of legal formation documents for startups (organizational, not funding documents), I have been giving a lot of thought to the essential areas that entrepreneurs/new companies need to cover. It’s not a huge universe. Here’s what I have come up with:
- Ownership split (if more than one founder) and vesting.
- Founder capital commitments.
- Management of the company/who’s on the board?
- Whether/how founder equity can be transferred. Under what conditions?
- If multiple founders: Can someone be forced to leave?
- What happens to a founder’s equity if she or he departs, whether voluntarily or involuntarily?
- Assignment of rights to all property created pre-formation by the founders to the new company.
That’s it, in my view. The rest is detail. Some important detail, mind you, but detail nonetheless.
What do you think?
Categorised as: Lawyering, Startup Stuff