6 Conversations to Have With Your Co-Founders Before You Incorporate
A great demo proves your technology works. A founding team that holds together proves your company will. Most founder fallouts have nothing to do with the tech. They trace back to assumptions about vision, roles, money, and commitment that nobody put on the table while things were still easy.
The Founders’ Assessment is a short questionnaire built to surface those conversations early, before the legal decisions lock in. It is an alignment tool, not a contract. Complete it on your own first, then compare and discuss as a team.
Overview
Here are the six parts of the Founders’ Assessment and what to get straight with your co-founders in each.
No. 1: Personal goals and vision
If one co-founder pictures a sale in three years and another wants to build for twenty, the conflict already exists. You just have not named it yet.
Talk through why each of you personally wants to build this company rather than take another path, what your shared vision is, and when you would call the company a success. Then decide the big one: are you building for a 7+ year journey or an earlier exit? That answer shapes everything from how you grow to the kind of company you are trying to become, so put it in writing and revisit it at each major milestone.
No. 2: Roles, responsibilities, and decision-making
In even-numbered teams, an unresolved decision mechanism creates deadlock. Agree on how you break a stalemate before you actually need to.
Get clear on who holds which role (CEO, CTO, business development), and how key decisions get made. Common models are unanimous, simple majority, a qualified two-thirds majority, or a CEO tie-break or veto on defined matters. Agree on a conflict-resolution process for when you hit a genuine stalemate, and on how you handle a co-founder joining or leaving later, including non-compete, non-solicitation, and buy-back of shares.
No. 3: Personal situation
Resentment builds when effort is unequal and unspoken. Name any imbalance early, and agree whether it is acceptable and how it shows up in roles or equity.
Be honest about how each of you finances your life right now and how long your personal budget lasts with no salary. Surface side jobs, studies, or other obligations, and the hours each of you can realistically commit per week. Then decide how you cover first costs like travel, prototypes, and software before outside funding arrives. Options include pro rata contributions from each founder, a lead founder pre-funding and getting reimbursed at the first financing, or a joint monthly budget with a cost cap.
No. 4: Trust and relationships
The hard questions are coming. If you cannot speak openly about them today, they do not disappear. They compound until they explode.
Ask whether you have spent enough time together, especially in a work context and not only socially. If the honest answer is not yet, agree on concrete steps: working sessions, a shared workation, or coaching. Confirm that you can communicate openly and constructively when you disagree on strategy or priorities, and write down an explicit feedback agreement covering how, when, and how often you give it.
No. 5: Equity, vesting, and investment
Investors expect a team to have thought about vesting and buy-back by the time you incorporate. It protects the company, the investors, and the founders who stay. Whatever you agree here becomes the substance of your formal documents.
Decide how equity is split at the start and why, and how you reflect brought-in IP or outsized early contributions. A common instinct is to hand a large premium for the original idea or an early prototype, and it usually causes more harm than it prevents. Decide whether you want reverse vesting so founders earn their shares over time, where four years with a one-year cliff is the market standard. And agree what happens if someone leaves, voluntarily or not, including good leaver and bad leaver terms and the buy-back price.
No. 6: Commitment
A startup eventually needs people who are all in. Define the point of no return so nobody is surprised when things get difficult.
Put the backup plans on the table: who currently holds a job offer, a PhD position, or another fallback. Agree by when each of you needs to choose between that option and the startup, and map each founder’s commitment timeline for the next 6, 12, and 24 months. Finally, name what you are actually committing to: a specific problem, a technology, this exact team, a minimum time frame, or all of it.
Capture it
No framework replaces the conversation. Once you have worked through the six parts, write down the positions you agreed on, decide who does what by when, and set a review date. Those agreed positions are what turn into your co-founder agreement, your shareholders’ agreement, and your vesting terms. That is the moment the Assessment stops being an exercise and starts protecting the team you are building.
This blog post is for discussion and general information purposes only and should not be considered legal advice.