Co-Founders relationship is like marriage, Love is not enough. Not all business partnership live happily ever after. Even those that live happily after, there are clear cut responsibilities, profits and liabilties for each of the founders


Business environment, especially here in Nigeria, can be brutal and frustrating, from personality difference to conflicting views on business strategy, long hours, limited cash can further cause problems.


Every business Lawyer will tell you for free that Business breakups are not the most pleasant of things, much more breakups between founders without a Co-Founders agreement. It may be messy for all involved, the founders, the investors and employees.


No investor worth his salt will invest in a co-founded business without a Co-Founders agreement between the founders.
E get why......

It is never too early to have a Co-Founder Agreement. With consent of the parties, it can be revised or re-written as time progresses.


A standard Co-Founder Agreements always have a vesting schedule. The standard vesting schedule is for four years with 13 month cliff period, and then monthly or quarterly depending on the agreement.

Explanation:
12 months cliff period means that a co founder will not be entitled to any shares until the first anniversary of the business.

This means that the founders have to put in efforts and contribution into the company for atleast one year for their first equity; and a monthly or quarterly increase thereafter.


LEAVER CLAUSE
Also important is the LEAVER CLAUSE.
What will happen to the shares of a Co-Founder who leaves before the a particular number of years e.g 5 years.
What will happen if a Co-Founder leaves to go and startup or join a competiting business.

This clause should cover all possible exit scenarios that is humanly conceivable.

All these makes a Co-Founder agreement a wisdom and a necessity in any business partnership.






Opatola Victor Esq.
adeopatola@gmail.com
09041815408 , 07069687425