The Times quotes James Broadhurst on the rise of the co-founder 'prenup'
min readVestd, an equity management software company, has said that it had seen a 500% increase in take-up of its “co-founder prenups” in the last 12 months. Like their marital counterparts, these agreements determine how assets are split should co-founder relationships falter.
James Broadhurst, Partner, provides comment for The Times and says that a founder prenup, otherwise known as a shareholders’ agreement, is “a good idea”.
Although the finer details will vary from company to company, he said there were a few key items that should be addressed including how and when shares can be sold, and to who.
“You wouldn’t want a fellow founder to have the ability to sell shares to a competitor without the right process in place.
“Another important point to iron out is what happens if a founder leaves, should they keep their shares? Founders should articulate what happens if they leave the business for a ‘bad’ reason, for example, they were dismissed or if they leave to work for a competitor.”
Above all, he advised founders to try to keep the arrangements as straightforward as possible.
Read the full article in The Times here (paywalled).
