Put the agreed co-founder exit terms into one clear agreement

A founder exit can affect several legal relationships at once. The departing person may be a shareholder, director, employee, contractor or creator of key intellectual property, and each role can raise different issues. If the exit terms are left in messages or verbal discussions, there may be uncertainty about shares, resignations, access to systems, ownership of code or branding, and what information can still be used after departure. A written agreement brings those points together in one place so the business has a clearer record of what has actually been agreed.

Common terms include the departure date, treatment of shares or any buyback arrangement, resignation from director or management roles, return of company property, confidentiality obligations, handover steps and ownership or assignment of intellectual property. Depending on the situation, the agreement may also deal with founder loans, announcements, access to systems, releases and post-exit restrictions. The exact wording matters because founder exits often involve overlapping rights and responsibilities, especially where the person helped build the product, brand or customer relationships.

We usually need the company structure, the founder's current roles, whether they hold shares directly, and whether there are existing documents such as a shareholders' agreement, service agreement or IP assignment already in place. It also helps to know what commercial points have already been agreed, such as a buyout figure, vesting position, transition period or restrictions after exit. If the founder created software, branding, content or customer materials, that background can be especially important because ownership and ongoing use often need precise wording.

A template can be too blunt where the departing founder has several connections to the business. One person might be a shareholder, director and creator of core IP at the same time, which means a short generic form may leave gaps around ownership, resignations, confidentiality or handover. A more tailored agreement is usually more useful where there are bespoke share arrangements, vesting issues, software or brand ownership questions, or concern about future competition. It can also help the exit terms sit more neatly alongside existing company documents.

Timing usually depends on how settled the commercial position already is. If the parties have broadly agreed the key points and the structure is straightforward, drafting can move more quickly. If there are open issues around shares, IP ownership, vesting or restrictions after exit, the process may take longer because the agreement needs clearer instructions. A useful next step is to gather any existing shareholders' agreement, founder service contract, cap table and a short summary of the proposed exit terms so the drafting can be framed accurately from the outset.

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