| >"Courts hold that a partner who leaves a business lacking an agreement does not lose rights to their portion of the business." So what is the big worry? That is exactly what I have said throughout this thread: you don't need to have a formal agreement to protect your stake in the company. The courts will protect you from being screwed out of something you're entitled to. Which is why I disagree that it is so vital to get an agreement in writing as soon as possible, before you even know what the business is. That's what happened in the original article, and that's what my hangup is, and that's what I've been commenting on. Yes, I agree, you don't want to be in a lawsuit, but having a formal agreement does not prevent a lawsuit if you have an equity dispute, nor will it supersede reason or rationale in a judgement if you end up in court. >"Had these founders not had an agreement, corporation or not, the founders who left would continue to have a very substantive claim on the business as part of the partnership." As they should! If they produced work or contributed money, and the business grew and provided income they have a claim on that income. >"That is why pretty much anyone giving competent advice instructs partners to decide how they should split equity and on a vesting agreement ASAP." Well, that's nice. It's also why there are 2 person shops running around the Valley, with someone titled "CEO" (but no board), calling themselves "businesses", taking in investment money but not producing a nickel worth of value, ever: priorities are often out of whack. Agree to disagree, I guess. I'm not here to offer anyone advice. Nor do I care that while I'm working on solving problems and investing in others that are doing the same, competitors are in-fighting about their equity. |