Critical Red Flags
No Vesting (Immediate Issuance): Founders get 100% of their equity day 1, with no incentive to stay.
Perfect 50/50 Split: Guaranteed recipe for deadlock. No clear tie-breaker for critical board decisions.
Individual IP Ownership: Founders retaining 'their' part of the code/design instead of assigning it to the company.
Missing Bad Leaver Clause: A founder who is fired for fraud still keeps their entire vested stake.
Must-Have Clauses
4-Year Vesting with 1-Year Cliff: The Silicon Valley and Indian VC standard for cap table health.
IP Assignment Agreement: Mandatory transfer of all past and future work to the Private Limited entity.
Roles & Decision Rights: Clear hierarchy (CEO v/s CTO) and defined 'Reserved Matters' needing 100% vote.
Shotgun / Buy-Sell Clause: A predefined mechanism for one founder to buy out the other in case of permanent rift.
Analyze Your Founders' Agreement Instantly
Upload your PDF and let our AI check for all these risks in 60 seconds.