Template Description
The Co-Founder Separation Agreement Template is a professionally structured and legally binding document used to formalise the exit of a co-founder from a startup. This 4-page Microsoft Word-based template is specifically designed for early-stage and growth-stage companies undergoing leadership transition. It outlines clear terms regarding resignation, equity treatment, intellectual property rights, confidentiality, non-compete clauses, and final settlement. This agreement ensures that the departing co-founder exits amicably, with minimal disruption to the business, while safeguarding the legal and operational interests of the company and its remaining stakeholders.
Understanding the Co-Founder Separation Agreement Template
This template is essential in scenarios where one of the original co-founders decides to step down or exit the company, whether voluntarily or involuntarily. The document minimises future legal and financial conflicts, preserves IP, and ensures the business’s continuity.
Key Features of the Template
- Structured Introduction and Parties Involved: The agreement begins by formally identifying the company and the departing co-founder, clearly stating their roles and legal relationship.
- Reason for Separation: Records the nature of the co-founder’s departure, typically voluntary and due to personal, professional, or strategic reasons.
- Separation Date and Formal Resignation: Clearly states the final working day and confirms resignation from all official roles
- Equity and Vesting Treatment: Details the number of total shares, vested and unvested, and the forfeiture of unvested shares as per governing agreements.
- Intellectual Property Assignment: Confirms that all IP developed during the co-founder’s tenure belongs solely to the company
- Non-Compete and Non-Solicitation Clauses: Binds the departing co-founder for 12–24 months post-exit from engaging in competing businesses, soliciting clients, employees, or investors.
- Confidentiality Obligations: Enforces a confidentiality period of up to 5 years after departure regarding any technical, business, financial, or investor-related data, regardless of existing NDAs or agreements.
- Public Statements and Reputation Protection: Restricts both parties from making derogatory public statements. Requires mutual consent for any press releases or LinkedIn announcements regarding the separation.
- Transition and Handover Responsibilities: Specifies the requirement for handing over devices, files, credentials, and transition support for a defined period.
- Final Settlement and Waiver of Claims: Stipulates the settlement of dues (salary, reimbursements, bonuses) within 15–30 days.
Conclusion
The Co-Founder Separation Agreement Template is a critical legal instrument in ensuring clean, fair, and structured co-founder exits. It promotes continuity for the company, protects its intellectual and financial interests, and mitigates legal or reputational risks arising from an unstructured separation. Whether used for amicable or sensitive departures, this document is an indispensable component of founder governance and corporate maturity in any startup ecosystem.