As a startup grows, clear agreements among founders and a well-structured employee stock option plan help align everyone's interests and reduce the chance of disputes.
What a founder agreement covers
- Roles and responsibilities of each founder
- Equity split and vesting arrangements
- Decision-making and dispute resolution
- What happens if a founder leaves
How ESOPs work
Employee stock options give team members the right to acquire shares in the company, usually subject to vesting over time. They are a common way to reward and retain key people while aligning them with the company's success.
Why clear terms matter
Ambiguity in these arrangements is a frequent source of friction later. Setting out the terms clearly at an early stage, when relationships are positive, tends to serve everyone well as the company evolves.
This guide is general information and not legal advice. Arrangements should be tailored to the specific company.
This guide provides general information about the law in India and is not legal advice. For advice on your specific situation, please consult a qualified advocate.