Do co-founders need a founders' agreement or a stockholders' agreement?
Co-foundersGovernanceFormation
Most venture-track startups do not sign a separate founders' agreement at formation, and it is not an oversight. The state's corporate statute and the bylaws already say how directors are elected, how the company is run and whether stock can be transferred. Each founder's restricted stock purchase agreement says how their shares vest, what happens to the unvested ones if they leave, and gives the company a right of first refusal over any sale. Between them those documents answer the questions a founders' agreement is meant to answer, and they bind each founder to the company, which is the same as binding them to each other.
What a separate agreement adds
A stockholders' agreement among the founders is worth having when the team wants something the standard documents do not provide. The usual additions: a buyout if a founder dies or becomes disabled, with a price or a formula, so the shares do not pass to an estate that has never heard of the company; a deadlock mechanism for a two-founder company that splits fifty-fifty, so that a disagreement has an exit other than a lawsuit; an agreement on who sits on the board and who holds which officer role; and tag-along rights, so one founder cannot sell to an outsider without the others being able to sell alongside. A company with two equal founders and no investors is the case where the deadlock clause matters most.
The trap
When the company raises a priced round the investors will replace any founders' agreement with their own voting agreement, right of first refusal and co-sale agreement, and investors' rights agreement. A founders' agreement that can only be amended with every party's consent, when one of the parties left the company a year ago and is not answering email, is an obstacle to the financing and a lever for the departed founder. Draft it so that a majority of the shares held by founders still with the company can amend or terminate it.
The agreement that is never optional
Whatever else the founders sign, each one signs a restricted stock purchase agreement with vesting and an assignment of the intellectual property they built. A team that has a long founders' agreement and unvested stock with no buyback right has the paperwork the wrong way round. The disputes that reach lawyers are almost never about a missing stockholders' agreement. They are about a founder who left with fully vested shares, or one who says the code was theirs.
Arabella's library has a founder term sheet discussion framework for working through roles, equity, vesting and departures before anything is drafted, and the Delaware bylaws the company adopts at formation.
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Written by the lawyers who built Arabella. This is legal information, not legal advice for your situation, and reading it does not make us your lawyers. For a real dispute or a high-stakes decision, talk to a licensed attorney. More questions.