Crafting A Founder Agreement at HealthCraft

Founders’ Agreement
Key elements to include
Company Profile Roles and Key Decisions Salary Third Party

Responsibilities Investment
Dissolution Exit Equity Distribution Seed Equity Intellectual

Property (IP)
Equity Distribution
Company equity will be distributed as follows:
40%
33%
27%
Kevin Rumsfeld Wendy Barrie Salvador Rube

COO CEO Head of Product
Equity Distribution Explanation
The final agreement was reached based on different key considerations: the roles and
responsibilities of each founder, past and future contributions, and other achievements
like the idea or the seed funding. All the key points were reflected in the FAST tool as
accurate as possible reaching the final agreement in the previous slide.
First, starting with Salvador, he has the least share out of the three. Although Salvador
contributed the highest seed funding to the company, and he played an important role in
the early phases, but he does not have much experience and it’s not yet clear whether he
will be able to grow with his responsibilities and roles. This point hinders Salvador from
being in a position of much authority and power. Also, the fact that Salvador might be ta
king a salary and Wendy and Kevin were the ones discussing the equity distributions and
the role descriptions for everyone, makes them in a more powerful position.
Kevin is the idea generator which makes him the primary reason of the startup. However,
besides the idea, Kevin invested the least time and money in the early phases before the
go-live, and this puts him in a position lower than Wendy . Wendy, on the other hand,
has a lot of experience and her responsibility as the CEO speaks a lot to the vital role
she will be playing. In addition, she has been present all the time in the early phases and
contributed a fair amount of seed funding. This puts Wendy in a position with the
highest share and Kevin in between her and Salvador.
Founders’ Agreement
A complete example
1/5
Company Profile
HealthCraft is a cloud-based system management software that
allows clients to manage their patient data more efficiently. It
allows physician groups and hospitals to standardize their
processes and effectively share information thereby smoothing
operations and increasing revenue.
Kevin Rumsfeld, Wendy Barrie and Salvador Rube comprise the

co-founders of the company.
Kevin Rumsfeld Wendy Barrie Salvador Rube

2/5
Kevin - COO
• Business plan development
• Office administration and daily operations
• Managing finances
• Business strategy and vision
Roles • Recruiting of team
Wendy - CEO
and • Business plan development
• Sales and marketing execution
• Raising capital
Respon- • Managing investors
• Recruiting of team
• Business strategy
sibilities
Salvador – Head of Product
• Business plan development
• Business strategy
• Overseeing product development and managing
consultants
• Recruiting of team
• Report to Kevin until a CTO is hired
3/5
Third Party Intellectual Property

Key Decisions Salary
Investment (IP)
For the first 6 months,

Salvador and Kevin will
All major company All founders’ equity will Healthcraft IP will belong
each take a salary of
decisions require a be diluted at the same rate to the company and not
$50,000/year while
majority of two thirds of to allow for third party the founder developing
Wendy will take $0.
the founders. investment. the system.
Salary amounts for all
founders will be revisited
in 6 months or when the
company is able to raise
funds.
4/5
Seed Equity Equity Distribution

Each founder will be allocated seed equity Company equity will be distributed as
determined by how much seed funding they follows:
contributed to the company Wendy - 40%
Kevin - 20% Kevin - 33%
Salvador - 50% Salvador - 27%
Wendy - 30% Kevin: Came up with the initial idea and is
taking a salary
Note: New founders have the option to Wendy: Not taking a salary
contribute up to $10,000 for 5% seed equity Salvador: Taking a salary
stake. All existing founders’ equity stakes are
liable for dilution (at the same rate) in order Note: If a new founder is brought in, all
to contribute to the new founder. existing founders’ equity stakes are liable for
dilution (at the same rate) to contribute to the
new founder.
5/5
Exit Dissolution
Any founder may resign from Founders may agree
the company at any time and unanimously to dissolve the
for whatever reason. company at any time.
Thank you

Crafting A Founder Agreement at HealthCraft

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Founders’ Agreement

Key elements to include

Company Profile Roles and Key Decisions Salary Third Party

Dissolution Exit Equity Distribution Seed Equity Intellectual

Kevin Rumsfeld Wendy Barrie Salvador Rube

Kevin Rumsfeld, Wendy Barrie and Salvador Rube comprise the

Kevin Rumsfeld Wendy Barrie Salvador Rube

Roles • Recruiting of team

Third Party Intellectual Property

For the first 6 months,

Seed Equity Equity Distribution

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