Startup Legal Documents

The paperwork that gets checked before anyone wires money

Startups tend to postpone documentation on the reasonable grounds that there is nothing to document yet. The problem is that the moment it starts mattering — a term sheet, an acquisition conversation, a co-founder leaving — is exactly the moment it becomes hardest to fix.

Almost everything on this page is cheap and quick to do at the start and expensive to resolve later.

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Before you build anything

Founders Agreement Equity split, vesting, roles, decision rights, IP assignment and what happens when someone leaves. This is the single most important document a startup produces, and the one most often skipped because the conversation is uncomfortable.

Three things it must contain:

• Vesting. A co-founder who leaves after four months should not keep half the company. Four years with a one-year cliff is the market standard and investors will expect it.
• IP assignment to the company. If the code, designs or brand belong to individuals rather than the entity, any future investment or sale becomes complicated in a way that is expensive to unwind.
• Exit valuation method. Agreeing that a departing founder is “bought out fairly” means agreeing to argue later. Set a formula.

NDA For conversations with potential partners, contractors and suppliers. Worth knowing: most institutional investors will not sign one, and asking can signal inexperience. Audience-specific guidance in NDAs for startups.

Building the team

Employment Contract For actual employees, with IP assignment and confidentiality built in.

Independent Contractor Agreement For freelancers and agencies. Critically, contractor agreements need explicit IP assignment — in many jurisdictions a contractor retains ownership of what they create by default, which is the opposite of the employee position and a frequent unpleasant surprise during due diligence.

NDA for Employees · Non-Compete Agreement Where confidentiality or restriction needs to stand separately. Non-compete enforceability varies enormously and some jurisdictions prohibit them outright.

Advisor agreements Covering equity, expectations and term. Generate via the AI generator under Business & Corporate.

Shipping the product

Privacy Policy Required before you can list an app in either major app store, run Google or Meta advertising, or complete most payment-processor onboarding. It must describe your actual data practices — a borrowed policy that names tools you do not use is a documented misstatement about personal data handling, which is worse than an incomplete one.

Terms of Service Separate document, different job. The privacy policy explains data handling; terms of service govern use of your product — acceptable use, liability limits, termination, payment terms. Generate under Business & Corporate.

Data Processing Agreement If you handle customer data on their behalf, B2B customers will ask for one. Also worth running any DPA sent to you through the AI Document Analyzer before signing.

Raising money

Shareholder Agreement Governs the relationship between shareholders after investment — voting, transfer restrictions, drag-along and tag-along rights, information rights. Distinct from a founders agreement, which usually pre-dates any external investor. Generate under Business & Corporate.

Partnership Agreement The manual form-builder route where a partnership rather than a company structure applies.

Loan Agreement Where a founder or friend lends money to the business. Founder loans documented only as bank transfers cause real problems at diligence.

The due diligence checklist

When someone is deciding whether to invest in or acquire you, these are the documents they ask for. Having them ready shortens the process considerably:

• Founders agreement with vesting schedule
• IP assignment from every founder, employee and contractor who has touched the product
• Employment contracts for all staff
• Contractor agreements with IP assignment
• Privacy policy and terms of service matching what the product actually does
• Customer contracts
• Any loan or convertible instrument
• Cap table reconciling to the signed documents

The item that most often derails a deal is IP assignment from an early contractor nobody remembered to paper.

FAQs

What legal documents does a startup need first?

A founders agreement covering equity, vesting and IP assignment, before there is anything worth arguing about. Everything else can follow.

What is the difference between a founders agreement and a shareholder agreement?

 A founders agreement is between the founding team, usually before external investment, and covers equity, vesting, roles and exit. A shareholder agreement governs the wider shareholder relationship after investment, including voting, transfers and information rights.

Do I need vesting if we trust each other? 

Yes. Vesting protects the founders who stay, not the company against the founders. Investors will require it, and adding it later means renegotiating equity people already consider theirs.

Will investors sign an NDA? 

Most institutional investors will not, and asking is often read as inexperience. Use NDAs with partners, contractors and suppliers instead.

Does my startup need a privacy policy?

 If you collect any personal data — including through a contact form, signup or analytics — then in most jurisdictions yes. Both major app stores and most advertising and payment platforms also require one regardless of size.

Who owns work created by a contractor? 

In many jurisdictions the contractor does, by default, unless the agreement assigns it explicitly. This is the reverse of the employee position and one of the most common gaps found during due diligence.

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IndigoEDocs produces AI-assisted drafts. Equity, IP and investment documents determine ownership and control — have them confirmed by a qualified business lawyer before signing.