

Ask HN: What contracts/paperwork should cofounders set up before starting work? - thethimble

We're in the process of starting a potentially profitable company.<p>Does HN have any advice on what sort of paperwork we should setup amongst us cofounders regarding ownership percentages, vesting shares, etc. None of us have any experience with the legal aspects of starting a company.<p>Should we seek legal counsel or is this something we could take care of ourselves? (Keep in mind that we're all broke college students).<p>Thanks for your help!
-Advait
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rrhoover
Here are some great resources we've been referencing:

Founders Agreements:
[http://www.yourlegalcorner.com/articles.asp?cat=corp&id=...](http://www.yourlegalcorner.com/articles.asp?cat=corp&id=15)
[http://blog.optimalupgrades.ca/2010/01/founders-
agreements-2...](http://blog.optimalupgrades.ca/2010/01/founders-
agreements-2/) [http://blog.simeonov.com/2010/02/22/startup-founder-
agreemen...](http://blog.simeonov.com/2010/02/22/startup-founder-agreements/)

Others: [http://startuplawyer.com/startup-issues/7-legal-documents-
fo...](http://startuplawyer.com/startup-issues/7-legal-documents-for-your-
tech-startup) [http://startuplawyer.com/incorporation/the-when-to-
incorpora...](http://startuplawyer.com/incorporation/the-when-to-incorporate-
decision-matrix) [http://startuplawyer.com/startup-issues/if-i-launched-a-
star...](http://startuplawyer.com/startup-issues/if-i-launched-a-startup)

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gregpilling
Get legal help. If you are college students there may be low cost legal help
available through your school. I regretted not getting legal advice for a
company i founded 7 years ago, lawyers are good at foreseeing problems that
you are unlikely to. Figure out vesting, what to do when a founder leaves,
what to do for new hire stock options, and how it will go when you raise or
borrow money.

~~~
thethimble
We hadn't considered getting legal help through our school. We'll definitely
look into that route. Thanks for the suggestions!

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code
If you're trying to build a scalable startup and raise funding, seek an
attorney to set everything up. There's quite a few different legal documents
you'll want in place beyond setting up the company and stock distribution. I
would not try to do this yourself. And ALWAYS vest all cofounders.

~~~
thethimble
We're planning on bootstrapping. We plan on having positive cash flow within a
couple weeks of deployment so the the cofounders agreed to foot the initial
costs. Unfortunately, that has its consequences (trying to spend as little as
possible). But from the looks of the comments here, it looks like everyone is
suggesting to get legal help. That's probably the route we'll take.

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jeffepp
Founders Agreement, Operating Agreement, Restricted Equity Agreement (for
vesting).

You should seek counsel. Remember that technically, each of you should seek
your own counsel (and so should the entity).

