legalWe all know that having a lawyer read something and give his approval will cost an arm and a leg.
My fellow cofounder sent me a 6 page cofounder agreement. While it may look fine to me, I am not experienced with this sort of thing.
Does cofounder usually get a personal lawyer to review these sort of things or does one need to trust them? I hope that this doesn’t sound too niave of a question.
Operating agreements are a cornerstone of your working relationship and should protect both of your interests, making it easier for you to get get stuff done.
It’s really important, then, that they’re written well, unambiguously, with fair terms for everyone.
Lawyers can definitely be a cost, but
You owe it to yourself to have a legal professional that specializes in this domain have a read and make recommendations to/for you.
Depending where you live, you might be able to find lower cost options for startups. Are you in the US? Try reaching out to the Small Business Association (https://www.sba.gov/starting-business/how-start-business/business-types/startups-high-growth-businesses) or seeing if there’s a state or local version of this where you are. Local organizations will be able to recommend local firms that might have more flexible terms for you.
By the way: having a lawyer read the agreement is not about trusting or not trusting your business partner. It’s about recognizing that neither of you are an expert, or at least that you’re not an expert on these things, and that you’re just doing your due diligence to make sure there isn’t something weird that would pop up in the future.
Good luck!
Interesting question.
Does this agreement detail ownership or shares? Is your co-founder more experienced with these agreements - have they sought legal advice?
These are some things to consider. If they have sought legal advice and created the agreements why not all sit down with the lawyer who drafted it and get them to take you through it? If they have done it themselves (DIY agreement) there is a good chance it may be unenforceable.
It is best to talk these things through. The agreement should detail things like roles and responsibilities. If you do not understand or agree to any part then don’t sign it. When you go through the agreement change the wording together (it is both of your agreement).
I have taken contracts to lawyers before, but have not received a huge amount of value in return. If it is a DIY agreement then perhaps just go through it together and tweak it so you both fully understand what is expected of each other and are happy with it.
Then move onto the important task of running your business…
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