Founders' Agreement Cost

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 2,801 reviews

Jump to Section

Need help with a Founders' Agreement?

CREATE A FREE PROJECT POSTING
Post Project Now

How much does a founders' agreement cost? A founders' agreement is a legally binding contract that governs the roles and relationships between a company's co-founders.

Founders' agreements are executed before a startup is incorporated and are a vital document for new business in which several founders have agreed to work together to develop a business.

A founders' agreement will set the tone for how the business will operate in the future, so it is essential that this contract is drafted correctly. Before hiring an attorney to draft this agreement, most people want to know how much a founders' agreement will cost. Let's explore this question and go over some general information about founders' agreements.

How Much Does a Founders' Agreement Cost?

The cost of a founders' agreement will vary based on several factors. The company's location usually plays a role in lawyer fees because the cost of legal services varies from state to state.

The complexity of the agreement will also affect the cost because a lawyer will spend more time drafting a more complex document. If the founders' agreement needs to include language about intellectual property, the client may need to seek the services of a lawyer who specializes in intellectual property, which could be more expensive than a typical contract or startup lawyer.

Founders' agreements can be complex documents that include terms and conditions relating to ownership structure, capital contribution, voting rights, and equity compensation. It is important to find a lawyer who has specific knowledge in drafting and reviewing these contracts.

Based on ContractsCounsel's marketplace data, the average cost of a founders' agreement is $762.50 .

What's Typically Included in a Founders Agreement

Founders' agreements can easily be customized to fit the needs of the co-founders of any startup company, so each agreement will include slightly different terms.

Even though terms vary, a comprehensive founders' agreement will address the following:

  • Roles and responsibilities of the co-founders. One of the most important roles of the founders' agreement is to establish the responsibilities of all the founding members. This can include defining roles like CEO, COO, and CFO.
  • The proportion of ownership. The founders' agreement should lay out the proportion of equity of each co-founder. The proportion of equity can be determined by monetary investments, experience and knowledge in the field, and existing intellectual property.
  • Vesting schedule. The vesting schedule regulates when each co-founder receives their shares in the company. Vesting schedules incentivize founding members to remain in the business longer. Instead of a member receiving the shares immediately, they only become entitled to the shares after a predetermined amount of time.

Other terms that are commonly found in founders' agreement include:

The co-founders of a startup can choose to have their founders' agreement be as detailed or complex as they desire. The more terms and conditions agreed upon and detailed in the agreement, the less the risk for future disputes.

Do You Need a Founders Agreement After Incorporation?

No. You do not need a founders' agreement after incorporation because a shareholders agreement will replace the need for a founders' agreement.

Although founders' agreements and shareholder agreements are similar, when a business incorporates, they are required by law to have a shareholder agreement. In addition to the terms and conditions addressed by the founders' agreement, shareholder agreements will add guidelines for operating the business.

If a company has a founders' agreement, they can have both a shareholder agreement and a founders' agreement. If the company never had a founders' agreement, there is no need to create one after incorporating.

Examples of Founders Agreement Projects

Founders Agreement Drafting

Many companies choose to hire a startup lawyer to draft an effective founders' agreement. Agreements will vary depending on the company and the industry, but a knowledgeable attorney will know the terms and conditions that must be included to make the agreement effective and enforceable.

An attorney who is hired to draft a founders' agreement will often meet and consult with the co-founders to ensure the agreement meets the company's needs and protects each member.

Founders Agreement Review

New startups with tight finances may find that hiring a lawyer to draft the founders' agreement is too expensive. In this case, the co-founders can prepare their own agreement and hire a lawyer to simply review the document.

Document review takes less time and should be a less expensive option. This will allow the company to save money but also know that their founders' agreement is legally binding and includes all necessary terms.

Founders Agreement Disputes

If a founders' agreement is drafted correctly, it should help avoid disputes because it lays out the roles and responsibilities of each member and should also contain a clause about dispute resolution.

Even with the best-written agreements, disputes between co-founders can still arise. Co-founders should reach out to an attorney as soon as possible after a conflict begins. Dispute resolution is more effective if started early.

Meet some lawyers on our platform

Gregory B.

52 projects on CC
View Profile

Elbert T.

1 project on CC
View Profile

Briana C.

43 projects on CC
View Profile

Justin K.

1 project on CC
View Profile

Drafting a Founders Agreement Cost

Drafting a founders' agreement will require the time and expertise of a licensed attorney, so companies should expect to incur legal fees.

According to ContractsCounsel's marketplace data, the average founders' agreement drafting costs are $875.00 across all states.

Reviewing a Founders Agreement Cost

Reviewing a founders' agreement should cost less than a drafting project, but a lawyer will still need to be compensated for their time and specialized knowledge.

ContractsCounsel's marketplace data shows the average founders' agreement review costs to be $450.00 across all states.

How Do Lawyers Charge for a Founders Agreement?

When a company hires a startup lawyer to draft a founders' agreement, review a preexisting contract, or settle a dispute, the lawyer can structure their fee agreement as an hourly rate structure or a flat fee structure.

Hourly Rates for a Founders Agreement

Hourly rate fee structures tend to be the more popular fee structure for most lawyers because it is the best way for lawyers to be compensated for their time.

In an hourly rate structure, an attorney bills the client at a set rate for the number of hours a project took to complete. This way, a lawyer is sure that they will be paid for all time spent on a client's project or case.

The marketplace data for ContractsCounsel shows the average hourly rate for a startup lawyer ranges from $225 - $300 per hour.

Flat Fee Rates for a Founders Agreement

Flat fee rate structures are growing in popularity, especially for legal document drafting projects. An experienced lawyer can determine how long a project should take after consulting with the client. The lawyer can quote the client a flat rate for the project that ensures the lawyer will be fairly compensated for their work.

Clients tend to prefer flat-rate fees because they know exactly what they are paying and won't be surprised by a high hourly rate bill.

ContractsCounsel's marketplace data shows the average flat fee rate for founders' agreement costs to be $762.50 .

Get Help with a Founders Agreement

Do you need help with a founders' agreement project? If so, post a project in ContractsCounsel's marketplace to receive flat fee bids from startup lawyers to handle your project. All lawyers on the ContractsCounsel's platform are vetted by our team to make sure you are provided with top-tier service.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

Keidi C. on ContractsCounsel
View Keidi
Member Since:
August 25, 2021

Keidi C.

Principal Attorney
Free Consultation
Get Free Proposal
Boston, MA
24 Yrs Experience
Licensed in MA, NY
New England Law | Boston

Keidi S. Carrington brings a wealth of legal knowledge and business experience in the financial services area with a particular focus on investment management. She is a former securities examiner at the United States Securities & Exchange Commission (SEC) and Associate Counsel at State Street Bank & Trust and has consulted for various investment houses and private investment entities. Her work has included developing a mutual fund that invested in equity securities of listed real estate investment trusts (REITs) and other listed real estate companies; establishing private equity and hedge funds that help clients raise capital by preparing offering materials, negotiating with prospective investors, preparing partnership and LLC agreements and advising on and documenting management arrangements; advising on the establishment of Initial Coin Offerings (ICOs/Token Offerings) and counseling SEC registered and state investment advisers regarding organizational structure and compliance. Ms. Carrington is a graduate of Johns Hopkins University with a B.A. in International Relations. She earned her Juris Doctorate from New England Law | Boston and her LL.M. in Banking and Financial Law from Boston University School of Law. She is admitted to practice in Massachusetts and New York. Currently, her practice focuses on assisting start ups, small and mid size businesses with their legal needs in the areas of corporate and securities law.

Jim S. on ContractsCounsel
View Jim
Member Since:
August 13, 2021

Jim S.

Attorney
Free Consultation
Get Free Proposal
Florida
36 Yrs Experience
Licensed in NY
Notre Dame

Jim Slattery most recently served as General Counsel at Regional News Network, a large owner of broadcast television stations. Jim is an experienced attorney with broad-based expertise. He is a seasoned negotiator who has been involved in negotiations as complex as the Olympic Games. Jim spent 18 years as Vice President for Business and Legal Affairs at NBCUniversal. Previously, Jim worked in the media industry in various roles at All American Television. Jim’s success can be attributed to his ability to properly analyze data, manage projects, lead teams, develop creative solutions for complex problems, focus on strategically optimizing assets, manage/allocate risk and collaborate with divergent constituent groups to achieve objectives. Jim received a J.D. and a B.B.A. from the University of Notre Dame.

Namrita N. on ContractsCounsel
View Namrita
Member Since:
August 18, 2021

Namrita N.

Attorney at Law
Free Consultation
Get Free Proposal
Plano, TX
2 Yrs Experience
Licensed in MN, TX
Mitchell Hamline School of Law

Retired Dentist transitioned to Law, with a special interest in Commercial Real Estate, Startup businesses, Asset Purchase Agreements, and Employment Contracts. I love to help dentists and physicians with legal issues pertaining to licensing, credentialing, employment, and general business-legal questions.

Jonathan H. on ContractsCounsel
View Jonathan
Member Since:
September 18, 2021

Jonathan H.

Owner
Free Consultation
Get Free Proposal
New York
10 Yrs Experience
Licensed in NY
Pace Law School

I’m an attorney focusing my practice on concierge corporate and intellectual property law for startups and high-growth companies. I also serve as outside General Counsel to several businesses in various sectors. Since founding my practice I've worked with hundreds of clients across a variety of industries. My experience as a former General Counsel of a premier edtech company gives me unique insight into the challenges my clients face and how to resolve them efficiently and cost-effectively.

George F. on ContractsCounsel
View George
Member Since:
August 18, 2021

George F.

Attorney
Free Consultation
Get Free Proposal
Astoria, NY
21 Yrs Experience
Licensed in NY
Fordham University School of Law

The Law Office of George K. Fuiaxis, from the very beginning in 2002, has built a reputation with its clients as an unmatched, diligent, hands on law practice that is always on duty to find the best course of action for its clients. With a supreme pledge of exceptional service to its clients in the areas of Real Estate (Commercial & Residential), Loan Modifications, Intellectual Property, Corporate Law & Business Transactions, Wills, Trusts & Estates, the Law Office of George K. Fuiaxis creates solutions for the many faceted problems faced by its clients. The office represents several various clients, including well known lending institutions, foreign and domestic corporations, sellers and buyers of residential and commercial real estate, residential and commercial landlords and tenants, well known restaurant and business owners, automobile dealerships, airline companies, well known fashion, sports and entertainment industry individuals and corporations, information technology (IT) startups and well known IT companies.

Chris J. on ContractsCounsel
View Chris
Member Since:
August 22, 2021

Chris J.

Outside Counsel
Free Consultation
Get Free Proposal
Irvine, CA
27 Yrs Experience
Licensed in CA
Loyola Law School, Los Angeles

I'm a business law generalist with over 24 years of experience, including as in-house General Counsel, as outside counsel through my own firm and as an attorney in an Am Law 100 law firm. My employers and clients uniformly appreciate my ability to (i) negotiate and close transactions quickly and effectively, and (ii) to make the complex simple. Among other things, I can efficiently assist you on entity formation, governance, and structure; HR issues; mergers and acquisitions; and the negotiation and drafting of all types of commercial contracts. I'm the proud recipient of multiple Martindale-Hubbell Client Distinction Awards given only to the top 5% of attorneys for quality of service.

Gregory W. on ContractsCounsel
View Gregory
Member Since:
August 23, 2021

Gregory W.

Business Attorney
Free Consultation
Get Free Proposal
Los Angeles
15 Yrs Experience
Licensed in CA
University of West Los Angeles

Strategic thinking business minded Outside General Counsel here to help you with your company. I have been able to help guide business owners from startup through series A, B, & C funding and ultimately IPO's. Regardless of your plans I am here to help you succeed as you grow your business.

Michael O. on ContractsCounsel
View Michael
Member Since:
February 14, 2022

Michael O.

Managing Attorney
Free Consultation
Get Free Proposal
Los Angeles
15 Yrs Experience
Licensed in CA, NY
University of Southern California

A corporate and commercial attorney with experience in transactional legal services including corporate and finance transactions, mergers and acquisitions, real estate, commercial contracts, bankruptcy, restructuring, international business transactions and general counsel services. Additional background skills and experience include investment banking, financial analysis, and commercial litigation. Sectors covered include technology, media, franchises, and business services providers, from start-ups to medium and large enterprises.

Daliah S. on ContractsCounsel
View Daliah
Member Since:
September 1, 2021

Daliah S.

Principal Attorney
Free Consultation
Get Free Proposal
Chicago, IL
18 Yrs Experience
Licensed in IL
University of Illinois College of Law

Daliah Saper operates a cutting-edge internet and social media law practice that regularly leads local and national media outlets to solicit her commentary on emerging internet law issues involving cyberbullying, sexting, catfishing, revenge porn, anonymous online defamation, domain name and user-name squatting, privacy, and the latest business decisions made by social media platforms such as Facebook, Twitter and YouTube. As a litigator Daliah represents companies bringing or defending business and intellectual property disputes. (She has argued cases in a number of jurisdictions including taking a case all the way to the Illinois Supreme Court.) As a transactional lawyer she helps clients choose the right business entity, drafts contracts and licensing agreements, advises on sweepstakes and contest rules, and ensures website terms of use and privacy policies are compliant, and provides comprehensive trademark and copyright counseling. Since founding Saper Law Offices in 2005, Daliah has been named a 40 Under 40 by Law Bulletin Publishing Co., a top Media & Advertising attorney by Super Lawyers Magazine 14 years in a row, and has been repeatedly recognized as a leading media and entertainment lawyer by Chambers and Partners. For the past eleven years, she also has taught entertainment and social media law at Loyola University Chicago School of Law.

Alex M. on ContractsCounsel
View Alex
Member Since:
August 26, 2021

Alex M.

Attorney
Free Consultation
Get Free Proposal
Los Angeles, California
11 Yrs Experience
Licensed in CA
Southwestern Law School

Mr. Mehdipour attended the University of California San Diego where he received his degree in political science. After graduating from UCSD, Mr. Mehdipour attended Southwestern University School of Law where he received his JD. Upon passing the bar, Mr. Mehdipour gained invaluable experience both in a law firm and business setting. Mr. Mehdipour uses his prior business and legal experiences to negotiate the most advantageous results for his clients.

Alen A. on ContractsCounsel
View Alen
Member Since:
August 26, 2021

Alen A.

Attorney
Free Consultation
Get Free Proposal
Los Angeles, CA
15 Yrs Experience
Licensed in CA
University of West Los Angeles

Alen Aydinian is a versatile attorney with over a decade of experience working with business owners and real estate professionals. Client engagement is central to a successful attorney/client relationship. Alen personally manages all client relationships so that his clients can see how their interests are being served at every stage of the process.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call