Avoid the legal pitfalls of cofounder beefs - Technical.ly Philly

Business

Nov. 15, 2017 9:53 am

Avoid the legal pitfalls of cofounder beefs

At “Swipe Right to Issue Equity,” hear from Drexel’s Entrepreneurial Law Clinic on the dos and don’ts of bringing on a cofounder.
Gavel.

Gavel.

(Photo by Flickr user Stacy Welsh, used under a Creative Commons license)

Attorney Steve Rosard, who runs Drexel University’s Entrepreneurial Law Clinic, is no stranger to cofounder fights.

“It seems that every semester our clinic has one or two clients that have an issue with this,” the lawyer tells Technical.ly. “They have multiple cofounders who got together over a cool idea, maybe worked on it together at a startup weekend and maybe found each other at a cofounder dating event or website, and agreed to start a business and split up ownership.”

If all goes well, the business grows and retains its leadership. But Rosard said not too long after the company’s set up often a cofounder will drop — out of boredom, over opposing views or to take a job etc. — leading to a squabble over the company’s equity. What then?

“A problem that could have been simple to deal with under a proper founders’ agreement with vesting, is one that takes significant time, attention and (if we weren’t a free service) legal fees to cure.”

On Nov. 29, Rosard and the Clinic’s student lawyers will talk vesting, equity splits, deadlock resolution mechanisms and other legal moves aimed at protecting a startup from cofounder fallout. The event, aptly titled Swipe Right to Issue Equity, is free and will happen at Drexel’s Thomas R. Kline School of Law.

(Here are more tips on cofounder scouting via the Technical.ly Toolkit.)

Register
Companies: Drexel University
-30-
CONTRIBUTE TO THE
JOURNALISM FUND

Already a contributor? Sign in here
Connect with companies from the Technical.ly community
New call-to-action

Advertisement

Why BarCamp Philly’s organizers are intentional about inclusion

The Timmy Awards return to Philly on Oct. 15

Philadelphia: Here are your nominees for the 2019 Technical.ly Awards

SPONSORED

Philly

How Relay is helping enterprise clients get proactive about customer engagement

Philadelphia, PA

Vistar Media

QA Engineer

Apply Now

Philadelphia, PA

PromptWorks

Senior Software Engineer

Apply Now

Philadelphia

Inspire

Manager, People Operations

Apply Now

WordCamp Philly returns this weekend in all its open-source, community-powered glory

Why NET/WORK Suburbs?

O3 World is throwing a one-time innovation conference next week at the Barnes

Philadelphia

Linode

Junior Systems Software Engineer

Apply Now

Philadelphia

Linode

Data Center Operations Engineer

Apply Now

Philadelphia

Linode

Systems Engineer

Apply Now

Sign-up for daily news updates from Technical.ly Philadelphia

Do NOT follow this link or you will be banned from the site!