Adv. Narayani Modi, BA.LLB, LLM, GGSIPU, Delhi
ABSTRACT
Startups often face a common challenge that arises between co-founders: major disagreements over roles, equity shares, and exit strategies. This research studies how a well-structured co-founder agreement can effectively avoid such circumstances by providing clear instructions for governance, exit mechanisms, and equity distributions.
The research methodology involves doctrinal research with a comparative analysis of co-founder agreements in various jurisdictions and their applicability to the Indian startup ecosystem. By examining some case studies, interviews with startup founders, and legal frameworks, particularly in the Indian Startup ecosystem, this paper seeks to clarify how the key areas of potential conflicts, such as equity distribution, exit provisions, conflicting visions, or role ambiguities can be addressed through a proper agreement. The research highlights how co-founder agreements can strengthen investor confidence and help prevent internal disputes, ensuring long-term stability.
The paper focuses on the critical role of co-founder agreements in alleviating startup conflict and ensuring equity in rapidly changing startup landscapes. It offers progressive suggestions for advancing these agreements, including dynamic legal frameworks and blockchain-based smart contracts.
Keywords: Startup conflicts, Co-founder agreements, roles & responsibilities, agreement clauses.
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