Some crucial decisions – such as major new hires, equity grants, the dismissal of a founder, long-term commitments and the raising of new equity – require board approval. As a rule, they also need the consensus of all founders. What happens if you disagree? Your start-up contract should challenge you, you will resolve disagreements and blockages. The two terms you`ll hear most often in SAFE agreements and most seed funding agreements are pre-money valuation and post-money valuation. Pre-money is the valuation of the business before investments take place. Valuation by money often refers to the value of the business after an investment cycle has taken place, para. B example the sale of a round of shares of series A. GUEST: Matias Vukusic is a Chilean startup lawyer who handles many SAFE deals in the venture capital industry. He can be reached on Twitter, LinkedIn or his website vukusic.cl. If the co-founders have different individual skills, the roles can be set up organically and you might be tempted to forego writing a founder agreement.

For example, when three co-founders founded BlackBuck in 2015, they divided roles by skill. Everyone agreed to accept a functional lead that matched their skills: fundraising, operations and sales. But many co-founders have significant overlap in skills and expectations. Taking into account the key terms – roles and responsibilities – in the agreement of your founders becomes crucial. The co-founders of BlackBuck decided not to write a formal agreement from the beginning. However, they took the time to clearly articulate expectations for responsibilities and division of roles. Aligning with these decisions has allowed his startup to evolve exponentially. Between July and December 2015, they went from three locations with three customers to 54 cities with 50 customers and the team grew from 35 employees to 250. In less than two years, they have developed a technology platform and built a network that has completely revolutionized the Indian freight forwarding industry. At the end of 2018, BlackBuck had more than 2,000 locations and served more than 10,000 customers.

There are many models for founder agreements, here are three notable sources:  What happens when a founder leaves or is invited to leave? Your founding agreement may introduce appropriate provisions on the attribution of intellectual property. By the way, your startup should get intellectual property rights not only from your co-founders, but also from your employees, consultants, and contractors. The SAFE agreement is only about six pages long and can be implemented quickly. This is a significant advantage over traditional legal documents, which span dozens of pages and can take months. Although there are now several versions of the SAFE agreement, it is the most commonly used document by start-ups when raising capital. It`s no exaggeration to say that your startup doesn`t matter until it`s on a16z`s radar. Facebook, Lyft, Instagram, Affirm, Roblox and Coinbase have all benefited from the first a16z investments. And with the company fresh out of a $9 billion fundraising campaign, startup founders are more eager than ever to understand the thought processes that determine who gets a coveted A16z seal of approval. Startups are about execution, not ideas. Dramatically uneven divisions of startup capital often favor the co-founder who came up with the startup`s original idea, as opposed to the founders of small groups who launched the product and generated the initial traction.

Matias Vukusic [00:14:58] Yes. The safe, I guess we`re talking about the safe is supposed to be simple, right? Right. So there`s a lot of typical language used in other contracts. It`s usually not included, but it`s part of this culture of handshake agreements in the startup industry because they say things move better and no one has time to wait and no one has time to wait for lawyers anymore. And especially in the rapidly evolving startup industry. Right. But of course, it comes at a price. This comes with cost, which is ambiguity. Right? So this paragraph that you`re reading, and actually it`s a little difficult because they`re saying that commercially reasonable terms like what`s a reasonable term, which is a reasonable term for startups, like I don`t like it, I`m not trying to avoid using that language because everyone has a different view of what they want to say. especially when it comes to costs that vary from jurisdiction to jurisdiction. For example, I`ve usually told companies how my clients who work in software, and they try to do spectrum to do international transactions like attorneys` fees in the United States, are usually perceived by us. That is not reasonable.

For Latin American countries, and this is actually something to take care of if your business model is based on having, for example, service marks or patents or trade names or copyrights. And that`s what you actually stand for, so you have to take care of doing it in the U.S. in order to play it and play it properly and generally startups like you said, they don`t have much. Most of the time, they have no registered intellectual property rights and founders. Most of the time, we don`t even know or worse about the worst moments, which is the most common. .