A founder shareholders’ agreement is not about mistrust. It is about designing fairness before pressure arrives.

In this article, I use the term founder SHA to refer to the shareholders’ agreement between the founders of an early-stage company. In some markets, similar arrangements may also be called founder agreements. In Finland, however, the practical document is usually a shareholders’ agreement: the agreement that regulates ownership, decision-making, vesting, transfer restrictions, leaver situations and other key rules between the founders and shareholders.

In the beginning, founder relationships often feel simple.

Everyone is excited. The company is new. The product or service is being built. Roles are flexible. Equity is discussed in positive terms. Nobody wants to slow things down by talking about exits, conflict or difficult scenarios.

That is understandable.

But it is also risky.

A founder SHA is not needed because founders do not trust each other.

It is needed because the future is uncertain.

People’s circumstances change. Contributions change. Motivation changes. Funding pressure increases. Customers arrive. Investors ask questions. One founder may leave. Another may contribute more than expected. The company may need to make difficult decisions.

A good founder SHA does not create mistrust.

It reduces the damage if things become difficult later.

Why early agreement matters

The best time to agree on difficult issues is before they become personal.

When everyone is aligned, founders can discuss structure calmly. They can agree what is fair before pressure, disappointment or money distort the conversation.

Once a founder conflict exists, every proposed solution may feel like a personal attack.

That is why delaying the founder SHA is dangerous.

The company may later face questions such as:

• What happens if one founder leaves?
• Can a passive founder keep a large ownership stake?
• Who decides if the founders disagree?
• Can a founder sell shares to an outsider?
• What happens if a founder joins a competitor?
• Who owns the IP created by the founders?
• What rights will investors require before investing?

These questions are much easier to answer before the problem appears.

Vesting is fairness over time

Vesting is one of the most important founder SHA topics.

It is also one of the most misunderstood.

Some founders see vesting as a sign of mistrust.

That is the wrong framing.

Vesting is not punishment. It is fairness over time.

If four founders each receive 25% of the company on day one, but one founder leaves after six months, should that founder keep the full 25% while the others build the company for the next five years?

Usually not.

Vesting aligns ownership with continued contribution.

A typical structure might include a four-year vesting period with a one-year cliff. This means that ownership is earned over time, and if a founder leaves very early, they may lose unvested shares.

The exact structure depends on the company.

The key point is that equity should reflect both past and future contribution.

Good leaver and bad leaver

Founder SHA should also define what happens when a founder leaves.

Not all exits are the same.

A founder who leaves due to illness, mutual agreement or circumstances outside their control is different from a founder who breaches obligations, competes with the company or acts dishonestly.

This is where good leaver and bad leaver provisions become relevant.

They may affect:

• whether the company or other shareholders can buy back shares
• what price is paid
• whether vested and unvested shares are treated differently
• whether the leaving founder retains any rights
• and how quickly the process happens

These provisions should be drafted carefully.

They are sensitive, but important.

Without them, a founder exit can create long-term ownership problems.

Decision-making and founder stalemate

Founders should also think about decision-making.

Early-stage companies often operate informally. That works until it does not.

A founder SHA should define which matters require consent and how decisions are made.

Important questions include:

• Who sits on the board?
• Which decisions require unanimity?
• Which decisions require majority approval?
• What happens if founders disagree?
• Are there reserved matters?
• Who can approve financing, hiring, major contracts or share issuances?

Founder stalemate can paralyse a company.

This is especially dangerous when the company needs to move quickly or raise financing.

A good agreement should include a practical mechanism for resolving deadlock or stalemate situations.

Transfer restrictions

A founder should not be able to freely sell shares to anyone.

Founder ownership is closely connected to trust, contribution and control.

That is why founder SHA usually include transfer restrictions, such as:

• restrictions on selling shares
• rights of first refusal
• consent requirements
• tag-along rights
• drag-along rights
• restrictions on transfers to competitors

These provisions help keep the ownership structure controlled.

They also make the company more investable.

Investors generally do not want unexpected outsiders entering the cap table.

IP ownership

Founder SHA should also support the company’s IP position.

The company should clearly own the technology, software, documentation, concepts, designs and other assets created for the business.

If founders create core assets before incorporation or outside employment arrangements, the rights should be assigned to the company.

This is critical for due diligence.

Investors will want to know that the company owns the business it claims to own.

Unclear founder IP ownership can create financing risk.

Investors expect founder issues to be clean

A founder SHA is not only an internal document.

It matters also to investors.

Before investing, investors may ask:

• Is there a shareholders’ agreement?
• Are founder shares subject to vesting?
• What happens if a founder leaves?
• Are IP rights assigned to the company?
• Are transfer restrictions in place?
• Are decision-making rules clear?
• Are there unresolved founder disputes?

If these issues are not addressed, investors may require them to be fixed before closing.

That can delay the round and reduce founder leverage.

What a founder SHA should cover

At minimum, founders should consider:

• ownership structure
• roles and responsibilities
• vesting
• good leaver and bad leaver provisions
• decision-making
• board composition
• transfer restrictions
• confidentiality
• non-compete and non-solicitation obligations
• IP assignment
• founder exit scenarios
• investor-readiness

The document does not need to be unnecessarily complex.

But it should answer the questions that become painful if ignored.

Final thought

Founder SHA is easy to postpone.

There is always something more urgent: product, customers, hiring, fundraising, delivery.

But when a founder problem appears, the missing agreement often becomes urgent immediately.

That is why founders should sign the agreement before it feels necessary.

Because the purpose is not to plan for failure.

The purpose is to protect the company, the founders and the fairness of the ownership structure if reality changes.

Vesting is not punishment.

It is fairness over time.

Senior Associate Marko Moilanen,

email: [email protected]

tel: +358 40 517 0002