legal, united-kingdom, co-founder, business-structureMy cofounder and I have a time constraint on incorporating our company (we got into an accelerator program and have a week to get the legals done). For “time’s sake” my cofounder wants to be the sole owner of the company until a lawyer can set-up the vesting agreement and share distribution.
He says that as soon as the lawyer gets back to us with the agreements, new company shares will be emitted (e.g. going from one share to ten), and my 40% will then be given along with a role as a director. He said that is exactly the same as being an actual co-founder.
I find this setup quite surprising: I would expect that a director with shares is still different, legally, from an actual co-founder. Should I feel wary about this scheme, or, on the contrary, is this a usual setup?
There is no legal significance to the term “co-founder.” It only matters if you want to have that term be on your resume.
People use the term “co-founder” quite loosely in that people who come on board significantly after founding are sometimes called co-founders.
You are present at the beginning so if you really want to be a cofounder you should discuss with your partner. If he isn’t willing to do that, then you should find out why and consider whether this is someone you want to be a co-founder with.
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