Founder Legal Playbook™
Founders who understand the legal framework make better decisions — about structure, equity, fundraising and hiring. This playbook gives you the complete picture: not just what the documents say, but why they're designed the way they are and where the real risks are.
What's inside
- Formation essentials — Delaware C-Corp vs. LLC, authorized shares, organizational documents, what not to skip
- Founder equity design — vesting mechanics, cliff rationale, good leaver / bad leaver, ROFR, drag-along rights
- Co-founder agreement — decision-making authority, tie-breaking, what happens when a founder leaves
- IP protection from day one — PIIA requirements, pre-formation IP assignment, contractor vs. employee IP ownership
- First hire legal requirements — offer letters, employment agreements, equity grants, classification
- Fundraising mechanics — SAFEs, convertible notes, Series A preferred: what each means for your equity
- Board structure by stage — when investors get seats, what protective provisions mean, how independents work
- Enterprise contracts — MSA structure, data processing agreements, indemnification, liability caps
- Exit considerations — M&A mechanics, representations and warranties, founder lockup, earnouts
Who this is for
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Frequently asked questions
What legal documents does every startup need at formation?
At formation: Certificate of Incorporation and Bylaws, organizational board resolutions, Founder RSAs with 4-year vesting, PIIA agreements for all founders, IP assignment of any pre-existing work, and an initial option plan. Missing any of these creates problems that are expensive to fix later.
Should I form a Delaware C-Corp or an LLC?
For venture-backed startups, Delaware C-Corp is effectively the only viable choice — VC funds have restrictions on investing in pass-through entities. For bootstrapped or small-business models, an LLC may make more sense. The decision should happen at formation, not when you're trying to close a round.
What is a SAFE and how does it work?
A SAFE (Simple Agreement for Future Equity) converts to equity in a future priced round. Key terms: valuation cap, discount, and MFN clause. YC's post-money SAFE is now the market standard — the playbook covers the mechanics in full, including how SAFEs affect your cap table.
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