launchlaw/
Step 1 of 13

Company & Cofounders

Basic information about your proposed company and the people involved.

The name you plan to incorporate under (can be changed later).
One or two sentences describing what the company will do.

Share Structure & Ownership

How the company's shares will be divided among cofounders.

If you're unsure about share classes or how to structure ownership, we recommend reading The Law for Founders first.
Common choices: 100, 1000, 10,000,000
Often nominal (e.g. $0.001)

Vesting / Purchase Options

Whether cofounders earn their shares over time, and what happens to unvested shares if someone leaves.

Vesting protects all cofounders. If one person leaves early, vesting ensures they don't walk away with their full share allocation. This is one of the most important terms to get right.

Board of Directors & Nominee Rights

How the board will be structured and who gets to appoint directors.

Finance, Spending & Loans

Spending authority, signing authority, and any cofounder loans to the company.

Maximum dollar amount any one cofounder can spend without needing approval.
Dollar threshold requiring more than one signature.

Compensation

Salaries and other compensation for cofounders.

Many early-stage cofounders defer salary until the company has revenue or funding. That's fine — just note it here so it's captured in the term sheet.
Expense policy, benefits, equity-based compensation, or anything else.

IP & Confidentiality

Intellectual property ownership and confidentiality obligations.

Non-Compete & Restrictive Covenants

Restrictions on cofounders competing or soliciting after leaving.

Shotgun (Buy-Sell) Clause

A mechanism that allows one cofounder to offer to buy out another at a stated price — and the other must either accept or buy the offeror's shares at that same price.

A shotgun clause is a powerful deadlock-breaking mechanism. It forces fairness because the offeror must name a price they'd be willing to sell at themselves. Read more in The Law for Founders.

Exit, Death, Disability & Divorce

What happens to shares when a cofounder leaves, dies, becomes disabled, or goes through a divorce.

Drag-Along & Tag-Along Rights

Mechanisms that protect majority and minority shareholders during a sale.

Drag-along: Allows a majority to force all shareholders to sell on the same terms. Tag-along: Allows minority shareholders to join a sale on the same terms. Right of first refusal: Existing shareholders get first chance to buy shares before they're sold to outsiders.

Dispute Resolution

How disagreements between cofounders will be resolved.

Anything else you want captured in the term sheet that wasn't covered above.

Review Your Term Sheet

Review your answers below. Click any section heading to go back and edit. When ready, generate your PDF.

Reminder: This is a non-binding term sheet for discussion purposes only. It is not a legal agreement and does not constitute legal advice. Take it to a lawyer.

The PDF is generated in your browser. Nothing is sent to any server.