When you start a new venture, there is about nothing: you do not have a legal structure and no money to start what you want to build. Just an idea and the will to start-up something new: you are Entrepreneurs…But there is no reason not to work as professionals or established companies that you intend to become soon… So below is advice to deal with these issues to start-up with unpaid talents and Sweat Equity partners.
Each founder should sign:
- Founders Agreement. This contract defines how the future founders intend to split the founders’ equity when things will become official. This document includes several points on how founders’ Sweat Equity contribute to the new venture (through Intellectual Property, expertise or time spent), and the percentage of founders’ equity related with. In this agreement, it is useful to add what would happen to the pooled IP if unfortunately the company never starts.
- Non-Disclosure Agreement (NDA) for each founder to protect the interest of the venture and to be sure the ideas will not be disclosed elsewhere.
- Consulting Agreement, stating that what founders or future employees create, is owned by the “Company”. This also allows a fair and equitable split if a potential founder decides to leave before founding.
Olivier Dellacherie, Executive Chairman, Talent4Boards Inc.
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