Document background
The Co-Founder Vesting Agreement is a fundamental document used when establishing or formalizing founder relationships in Canadian companies. It is typically implemented at company formation or during early-stage development when founders receive equity stakes. The agreement ensures founders remain committed to the company's growth by gradually vesting their shares over time, typically 3-4 years, often with a one-year cliff. This document, compliant with Canadian corporate and securities laws, includes essential provisions such as vesting schedules, termination clauses, share restrictions, and potential accelerated vesting triggers. It protects both the company and co-founders by clearly defining equity ownership rights, transfer restrictions, and obligations, while addressing scenarios such as early departure or company sale. The agreement is particularly crucial for startups seeking investment, as investors typically require founder vesting arrangements to ensure key personnel retention.
