Co-Founder Partnership Agreement for New Graduates

What a good one includes

• A clear vesting schedule for all co-founders, ensuring equity is earned over time rather than handed out all at once on day one.
• A detailed breakdown of day-to-day responsibilities and decision-making authority to prevent overlapping efforts or deadlocked disagreements.
• An intellectual property assignment clause that guarantees all code, designs, and ideas created for the business belong to the company rather than the individual creator.
• Explicit buyout and exit provisions detailing exactly what happens to a founder's shares if they decide to leave the venture early.
• A record of initial cash or asset contributions from each founder and the process for handling future funding needs.
• A structured dispute resolution process, such as mediation or a tie-breaking vote system, to keep the business moving forward when founders disagree.

Common mistakes to avoid

• Splitting equity fifty-fifty on day one without a vesting schedule, which risks leaving a departing founder with a massive chunk of your company's future value.
• Relying on verbal understandings about roles and responsibilities instead of putting specific expectations in writing.
• Forgetting to assign the intellectual property created before formal incorporation to the business, leaving the company's core asset legally vulnerable.
• Assuming everyone will stay committed forever and failing to outline a clear, fair process for when a founder needs to step away.

Frequently asked questions