I was just offered a position as cofounder of a startup with someone who I have not known previously are there any legal steps to take?


2

I was just offered a position as cofounder of an already established startup. The revenue on it is minimal. This was the first I had met the founder. Are there any legal steps or other steps I should take?

Co-Founder Legal

asked Apr 26 '11 at 06:45
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Chromedude
202 points

1 Answer


6

There is a pretty good list of the top ten legal mistakes startups often make.

The biggest ones:

  • Make sure the company is properly incorporated and has paperwork provided by a lawyer with a lot of startup experience
  • Make sure the founders have clearly-defined ownership, so you know exactly who owns what
  • Make sure there is no risk that anyone else will have a claim on the company (Facebook-style) -- most importantly that the founder is not working at some other company that might own the work he's created
  • Make sure all founders stock is subject to vesting
  • Make sure to chose the 83(b) election while the stock is still worthless

And on a personal basis:

  • You're getting married to this co-founder... make sure it's really someone you want to spend the next 4 years with, day and night. If this is not the kind of person who you would have fun with being stuck in tornado-destroyed St. Louis airport for 24 hours waiting for the next flight home, move on.
answered Apr 26 '11 at 06:54
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Joel Spolsky
13,472 points

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Co-Founder Legal