Stock Purchase Agreement Form

Wrap Up. Founders stock refers to the shares issued to the originators of a company. Often, the stock does not receive any returns up to the point that a dividend is payable to the common stockholders. Founders stock comes with a vesting schedule, which determines when the shares are exercisable.

Rather, when a startup first forms, the founders grant themselves Restricted Stock Awards (RSAs) instead of common stock options. Essentially the company sells them the stock at zero cost. In the 20th century founders were taking a real risk on salary, betting their mortgage and future.

Founders receive direct issuances of Common Stock (not options) Non-Founder employees receive ISOs (options)Investors receive Preferred Stock, or SAFEs/Convertible Notes that convert into Preferred Stock.

As a rule, independent startup advisors get up to 5% of shares (or no equity at all). Investors claim 20-30% of startup shares, while founders should have over 60% in total. You may also leave some available pool (5%), but don't forget to allocate 10% to employees.

A Founders' Agreement is a contract that a company's founders enter into that governs their business relationships. The Agreement lays out the rights, responsibilities, liabilities, and obligations of each founder.

Founders' stock is the common stock issued to the founders of a company. These stocks have slightly different characteristics when compared to the common stocks sold in the secondary market. The main difference is that founders' stock is issued only at par value and has a vesting schedule that comes with it.

A founders' agreement is a legally binding contract, usually in writing, that outlines the roles, rights, and responsibilities of each owner in a business.