A founders' agreement is a document created by the founders of a company to establish how the company will function. It is the product of pre-incorporation discussions that should take place among the company's founders before they establish the company. It includes provisions on ownership structure, decision making, dispute resolution, choice of law, transfer of ownership, ownership percentages, voting rights, intellectual property rights, and more.
Yes, there could be tax implications depending on how the note is structured and your individual tax situation. It’s wise to chat with a tax professional to avoid any surprises.
Look for clear terms, the interest rate, any limits on the conversion, and how the company plans to grow. Just make sure you read the fine print!