Five clauses founders regret leaving out of a shareholder agreement

A leaver clause decides whether a departing founder keeps their shares, sells them back, and at what price. Without one, a co-founder who leaves in the first year can keep a third of the company for good.¹

Two founders with fifty per cent each will one day disagree. A deadlock clause sets out what happens next: a chair's casting vote, a mediator, or a buy-sell mechanism that forces one side to make an offer.

Drag-along lets a majority sell the whole company without a small holder blocking it. Tag-along protects that small holder by letting them join any sale on the same terms. A buyer will expect both.²

Shares that are earned over time, usually four years with a one-year cliff, keep everyone working for the same thing. Adding vesting after the fact is possible, but it is a hard conversation.

A shareholder who cannot see the accounts cannot judge the company. A short clause on monthly figures and annual budgets prevents a great deal of suspicion later.