The co-founder agreement: what to put in writing

Most startups do not die from a bad product, but from conflicts between the founders. At the outset, enthusiasm makes putting the rules in writing seem superfluous: you trust each other, you are friends, you split everything fifty-fifty. Then the money arrives, the hard decisions come, someone leaves — and without a clear agreement the project stalls exactly when it most needs to run. The co-founder agreement is the insurance you take out with a clear head, before you need it.

Why sign it early

The best terms are negotiated when no one yet has any reason to argue. Writing the rules at the start forces different expectations — about commitment, roles, ambitions — to surface, when they would otherwise stay hidden until the clash. An agreement signed in calm times protects everyone: those who stay and those who go. Postponing it until “things become clear” means facing it at the worst possible moment, under tension. And for investors a solid agreement is a sign of seriousness: a cap table with founders who have no agreements in place is a risk many funds will not accept.

The equity split

The most delicate question is: who owns how much? Splitting everything down the middle to avoid awkwardness is often a mistake: it ignores who had the idea, who puts in more time, who brings the capital, who takes on more risk. Some principles:

Let the stake reflect the overall contribution, not just the initial moment.
Consider the future, not only the past: someone who will work full-time for years is worth differently from someone contributing part-time.
Avoid structural deadlock: a 50/50 split with no unlocking mechanism can paralyse every contested decision.

There is no “correct” split in absolute terms: there is the one that is discussed openly and accepted by everyone.

Vesting: the most important clause

Vesting is the mechanism by which shares are earned over time, rather than acquired all at once. It is the clause that protects the project from the most feared scenario: a founder who leaves after a few months keeping a huge slice of the company, while those who remain work for years to grow it.

Gradual vesting over several years: shares are earned by staying and contributing.
Initial probation period (cliff): if a founder leaves very early, they vest nothing.
Rules for those who leave: what happens to the shares not yet vested.

Without vesting, the partner who leaves first can become the most expensive shareholder in the company. In the Swiss AG (SA) and GmbH (Sagl), vesting is built through contractual agreements between the members, to be drafted carefully so that they produce real effects.

Roles and decisions

A good agreement clarifies who does what and who decides what:

Roles and responsibilities of each founder, to avoid overlaps and gaps.
How decisions are made: which require unanimity, which a majority, which are delegated to a role.
Managing deadlock: a mechanism to break situations in which the founders cannot reach agreement.

Ambiguity over roles is among the most frequent causes of daily friction.

Exit, intellectual property, commitments

Some points that are often forgotten and later weigh heavily:

A founder’s exit: what happens to their shares (buy-back and pre-emption clauses), at what value, on what timing.
Intellectual property: everything the founders create for the project must belong to the company, not to the individuals. It is a point investors always check.
Commitment and dedication: how much time each devotes, whether there are parallel activities, what non-compete obligations apply.
Confidentiality: protection of the project’s sensitive information.

These steps have corporate, contractual and tax implications: they must be drafted consistently with the articles of association and the chosen legal form.

In short

Startups fail more from conflicts between founders than from the product.
The agreement is signed in calm times, at the start, when negotiating is easier.
Let the shares reflect the overall and future contribution, not a convenient 50/50.
Vesting is the key clause: it protects those who stay from those who leave early.
Put roles, decisions, exit and intellectual property in writing.

How we help you

We help founding teams structure the agreement and corporate governance: equity split, vesting, exit rules, protection of intellectual property and a clean cap table, designed also with capital rounds in mind. Let’s talk about your agreement.