Founders agreement, Tidalflow

Founders agreement template

Two people in Fremantle are building a tide and swell planning app and have not registered a company yet. There are no shares to issue, so this agreement fixes the split, records why it is 55/45 while the memory is fresh, and turns itself into shares on the day the company exists.

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This agreement is made on 7 September 2026 between Marcus Oyelaran of Fremantle WA 6160 and Jenna Whitmore of North Fremantle WA 6159. They are building Tidalflow, a tide, swell and wind planning app for recreational boat owners, and they intend to incorporate a company to own it.

Tidalflow is a mobile and web application that combines tide, swell, wind and boat ramp data into a single go or no go view for recreational skippers, sold by subscription. The founders will work together to build, launch and grow it.
While this agreement is in force neither founder will work on a competing product, whether alone, for an employer or as an adviser. Each founder may keep unrelated paid work disclosed in clause 3.3.

The split is not equal and both founders want the reason written down while it is still fresh, so that neither has to reconstruct it from memory in two years. These are the four things it was weighed on.

Neither founder may reopen the split because the work turned out harder or easier than expected. It changes only by written agreement between both of them, or under clause 6.
The cash each founder has put in, set out in the table above, is recorded as a loan to the venture, repayable without interest once the company holds $150,000 in cleared funds. Those loans do not buy additional shares.
Marcus Oyelaran works on Tidalflow full time from the date of this agreement. Jenna Whitmore works at least three days a week until 1 March 2027 and full time from that date. Full time means at least 40 hours a week.
Neither founder is paid until the venture reaches $25,000 in monthly recurring revenue or completes a funding round of at least $500,000, whichever comes first. Salaries are then set together and reviewed every twelve months.
Jenna Whitmore will continue two days a week of consulting for a marine retailer until 1 March 2027. Marcus Oyelaran has no outside work. Any new outside commitment must be disclosed in writing before it starts.
All 1,000,000 founder shares are subject to vesting from 7 September 2026, which both founders agree is the date they started working on Tidalflow together. Neither founder starts with vested equity.
Twenty five percent vests on 7 September 2027, and one forty eighth of the total vests at the end of each month after that until 7 September 2030. That is 137,500 shares for Marcus Oyelaran and 112,500 for Jenna Whitmore at the twelve month cliff.
Vesting stops on the last day a founder works on Tidalflow at the commitment set in clause 3.1. A period of illness, parental leave or agreed sabbatical of up to three months does not stop vesting.
All unvested shares vest immediately before a sale of the business or of more than half the shares to an unrelated buyer.
Each founder assigns to the venture, and on incorporation to the company, all intellectual property they create for Tidalflow, including code, the tide model, designs, brand, copy, datasets and customer lists.
The tide model and prototype Marcus Oyelaran built before this agreement are assigned to the venture in full. They are not licensed and no royalty is payable for them.
Domain names, app store accounts, cloud accounts, repositories, the brand and the social handles are held for the venture, and on incorporation are transferred to the company. Neither founder may hold an account for Tidalflow in a personal name once the company exists.
Neither founder will put code, data or artwork into the product that the venture is not licensed to use commercially. Every data licence and every open source component is recorded in a register kept by Marcus Oyelaran.
A founder who resigns after giving 60 days notice, or who leaves because of death or permanent incapacity, keeps every vested share. Unvested shares are bought back by the company for their issue price.
A founder who leaves through serious misconduct, a serious breach of this agreement that is not fixed within 20 business days of notice, or fraud, forfeits all unvested shares and the company may buy back half of their vested shares at issue price.
A departing founder returns devices and credentials, transfers every account, hands over documentation and signs anything needed to confirm the IP assignment in clause 5. The remaining founder may then reallocate the role however they choose.
For twelve months after leaving, a departing founder will not build or work on a marine weather planning product for recreational boating in Australia or New Zealand, and will not approach a Tidalflow customer, supplier or employee.
Hosting, data licences, app store fees, design tools, insurance and anything the two founders agree in writing. Each founder pays for their own laptop, phone and home internet.
Either founder may commit up to $2,000 alone. Anything above that needs both. A recurring subscription is measured by its annual cost, not its monthly one.
Every expense is receipted and entered into the shared ledger within seven days, so that the loans in clause 2.2 can be reconciled without argument.
Each founder keeps the product plans, the model, the metrics, the pricing work and any investor conversation confidential, and uses that information only for Tidalflow. This survives for three years after a founder leaves.
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The founders will register an Australian proprietary company by 31 March 2027, or earlier if an investor requires it, and will be its only directors and shareholders at that time.
On registration the company adopts this agreement, issues the shares in clause 2, takes the IP assignment in clause 5, assumes the loans in clause 2.2, and the vesting in clause 4 continues from 7 September 2026 without restarting.
This agreement is replaced by a shareholders agreement when an external investor first subscribes for shares. Until that happens it is the only document governing the relationship between the founders.
The laws of Western Australia apply and both founders submit to the courts of that state.
This agreement may be varied only in writing signed by both founders. It may be signed in counterparts and by electronic signature, and a signed counterpart has the same effect as an original.

Signed by both founders, each of whom confirms they have read this agreement, understand that it can cost them equity, and have had the opportunity to take independent legal advice before signing.

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Section by section

What each section is for, so you can keep the ones you need and drop the rest.

Cover and opening
A contract cover naming both founders and the venture, then a paragraph on what they are building and their intention to incorporate.
Signed before the company exists
An information panel explaining that with no company there are no shares, so this document fixes the split and clause 10 converts it on registration.
1. What we are building
The product in one sentence, and an exclusivity clause that bars competing work while allowing the disclosed outside consulting.
2. The equity split
The table weighing four inputs for each founder, a stats row with the 55/45 split and 1,000,000 shares, and clauses fixing the split and treating cash contributed as a loan.
3. Roles and time
Who owns product against who owns commercial, what needs both, the hours each founder commits, the revenue trigger before anyone is paid, and the outside work already disclosed.
4. Vesting
Everything vesting from the day they started together, a twelve month cliff then 36 monthly instalments, a table of vested shares by year, and acceleration on a sale.
5. Intellectual property
Assignment of everything created for the venture, the pre-existing model assigned outright, transfer of domains and app store accounts, and a register of licences and open source components.
6. If a founder leaves
Good leaver and bad leaver outcomes, what is handed back on the day, and a twelve month restraint on building a competing marine planning product.
7. Money and expenses
What the venture pays for against what each founder funds personally, a $2,000 solo approval limit measured on annual cost, and receipts entered within seven days.
8. Confidentiality
Product plans, metrics, pricing work and investor conversations kept in, surviving three years after a founder leaves.
9. Disagreements
The owner of the area decides, either founder may call one 48 hour pause, then mediation, then a buy or sell offer answered within 30 business days.
10. Incorporating
A deadline of 31 March 2027, what carries across on registration, and the point at which a shareholders agreement replaces this document.
11. General and execution
Western Australian law, variation in writing, counterparts and electronic signing, then a signature block for each founder.

What makes this document work

It records the reasoning, not just the percentage

A four row table weighs idea and prior work, cash contributed, time from day one and role, with a line for each founder. One built the tide model over 14 months and put in $40,000; the other joined at prototype and works three days a week until March. The 55/45 is the output of that table, so in two years nobody has to reconstruct it from memory.

Money in is a loan, not extra equity

The $40,000 and the $10,000 already spent are recorded as interest free loans, repayable once the company holds $150,000 in cleared funds, and they buy no additional shares. Without that clause the split moves every time one founder pays a hosting bill, which is how equity arguments usually start.

Every share vests, including the head start

All 1,000,000 founder shares sit on a four year schedule from the day the two started working together, with nothing vested at signing and a cliff at twelve months. The founder who had a 14 month head start was paid for it in the split itself, not in pre-vested equity, which keeps the incentive pointing forwards.

Questions people ask

Can you sign a founders agreement before registering a company?

Yes, and it is often the right moment. This one binds the two people rather than a company that does not exist, then clause 10 converts it: on registration the company issues the shares, takes the intellectual property assignment, assumes the two loans, and the vesting clock keeps running from 7 September 2026 without restarting.

Who owns code and designs written before the company existed?

Whoever created them, until they are assigned in writing. The general Australian position is that a business owns what its employees create in the course of their work, while a contractor keeps ownership unless the contract says otherwise. Founders are usually neither, so an express assignment is the only reliable route. Clause 5.2 assigns the earlier tide model and prototype in full with no royalty.

Should founders always split equity 50/50?

Only if the four inputs really are equal. Here they are not: different prior work, four times the cash from one side, and different starting hours. Writing the split as the answer to a table makes an uneven number easier to accept than a round one that nobody can justify later.

What is a bad leaver clause?

The rule that treats a founder who leaves badly differently from one who leaves well. In this agreement a good leaver keeps every vested share and gives up the unvested ones at issue price. A bad leaver, meaning serious misconduct, fraud or a serious breach left unfixed for 20 business days, forfeits everything unvested and can have half of their vested shares bought back at issue price too.

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