ContractsCounsel Logo
Home Blog Founders' Agreement Cost

Jump to Section

ContractsCounsel has assisted 25 clients with founders' agreements and maintains a network of 46 startup lawyers available daily.

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

Bryan B.

269 projects on CC
CC verified
View Profile

Darryl S.

57 projects on CC
CC verified
View Profile

Daniel R.

146 projects on CC
CC verified
View Profile

Ryenne S.

651 projects on CC
CC verified
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.


ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


Need help with a Founders' Agreement?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 11,298 reviews

Meet some of our Lawyers

Bryan B. on ContractsCounsel
View Bryan
4.8 (145)
Member Since:
October 1, 2020
Jane C. on ContractsCounsel
View Jane
4.9 (86)
Member Since:
October 9, 2020

Jane C.

Attorney
Free Consultation
New York
19 Yrs Experience
Licensed in CT, DC, NY
Pace University School of Law

Skilled in the details of complex corporate transactions, I have 15 years experience working with entrepreneurs and businesses to plan and grow for the future. Clients trust me because of the practical guided advice I provide. No deal is too small or complex for me to handle.

Keidi C. on ContractsCounsel
View Keidi
5.0 (12)
Member Since:
August 25, 2021

Keidi C.

Principal Attorney
Free Consultation
Boston, MA
26 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 operating 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 investors, start-ups, small and mid-size businesses with their legal needs in the areas of corporate and securities law.

Jordan M. on ContractsCounsel
View Jordan
5.0 (2)
Member Since:
October 14, 2021

Jordan M.

Partner
Free Consultation
Houston, TX
5 Yrs Experience
Licensed in TX
University of Houston Law Center

I am a software developer turned lawyer with 7+ years of experience drafting, reviewing, and negotiating SaaS agreements, as well as other technology agreements. I am a partner at Freeman Lovell PLLC, where I lead commercial contracts practice group. I work with startups, growing companies, and the Fortune 500 to make sure your legal go-to-market strategy works for you.

Grant P. on ContractsCounsel
View Grant
Member Since:
October 12, 2021

Grant P.

Founder
Free Consultation
New York
21 Yrs Experience
Licensed in FL, NJ, NY
Brooklyn

Founder and owner of Grant Phillips Law.. Practicing and licensed in NY, NJ & Fl with focus on small businesses across the country that are stuck in predatory commercial loans. The firm specializes in representing business owners with Merchant Cash Advances or Factoring Arrangments they can no longer afford. The firms clients include restaurants, truckers, contractors, for profit schools, doctors and corner supermarkets to name a few. GRANT PHILLIPS LAW, PLLC. is at the cutting edge of bringing affordable and expert legal representation on behalf of Merchants stuck with predatory loans or other financial instruments that drain the companies revenues. Grant Phillips Law will defend small businesses with Merchant Cash Advances they can no longer afford. Whether you have been sued, a UCC lien filed against your receivables or your bank account is levied or frozen, we have your back. See more at www.grantphillipslaw.com

Jonathan K. on ContractsCounsel
View Jonathan
Member Since:
November 12, 2021

Jonathan K.

Principal
Free Consultation
New York, Europe (Germany, UK)
15 Yrs Experience
Licensed in NY
Georgetown University Law Center

Pico & Kooker provides hands on legal advice in structuring, drafting, negotiating, interpreting, managing and enforcing complex high value commercial transactions. Adept at navigating complex environments, Jonathan has extensive expertise advising clients on a wide range of long- and medium-term cross border and financial engagements, including public tender participation, PPPs, export sales agreements as well as policy and regulatory formulation. Jonathan and his co-founder, Eva Pico have represented and acted on behalf of lenders, global corporations and other market participants across a range of industries including financial services, infrastructure and transportation. As outside counsel, Pico & Kooker, has developed a strong rapport and working relationship with their clients and appropriately work with their in-house teams to increase consistency, processes and procedures. The company employs a unique approach as practical, business minded outside legal counsel who believe in proactively partnering with their clients to achieve desired results while managing and engaging key stakeholders. They listen to their clients to develop customized solutions that best meet their needs while aligning with their objectives, vision and values. Some representative transactions include advising the World Bank on project finance and portfolio options to address the costs and risks associated with integrating renewable power sources. Also advising them as legal counsel, Jonathan developed policies, regulation and models for emerging market governments entering into public-private partnerships. In addition to his work with the World Bank, Jonathan has worked with some of the world’s largest consulting firms, financial institutions and governmental organizations, including the United Nations, the governments of the US, UK and select African countries. Through out his career, he has worked with large, multinational corporations both by consulting in-house and acting as outside counsel on large cross-border transactions. He graduated from Georgetown University’s law school and was admitted practice as a lawyer in New York, England and Wales and, as a foreign lawyer, in Germany. He has written several articles for trade journals and has been cited by several business publications in worldwide. Jonathan is a native English speaker and has high proficiency in German and a functional understanding of Spanish.

Pelin U. on ContractsCounsel
View Pelin
Member Since:
October 18, 2021

Pelin U.

Founding Attorney
Free Consultation
Leander, TX
3 Yrs Experience
Licensed in TX
Rutgers Law School - J.D. / Law

I am a solo practitioner and the founding attorney at Uzay Law, PLLC, where I provide legal services in family-based immigration, citizenship, and naturalization. In the past, I also advised clients on employment-based immigration, contract, and business matters. I am licensed to practice law in Texas. Before practicing law, I worked as a producer and film consultant in New York for almost two decades. I am fluent in English and Turkish.

Find the best lawyer for your project

Browse Lawyers Now

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Need help with a Founders' Agreement?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 11,298 reviews
CONTRACT LAWYERS BY TOP CITIES
See All Startup Lawyers

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

View Trustpilot Review

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

View Trustpilot Review

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

View Trustpilot Review

Need help with a Founders' Agreement?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 11,298 reviews

Want to speak to someone?

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

Request a call

Find lawyers and attorneys by city