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Sweat Equity Agreement Template for Ireland

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Key Requirements PROMPT example:

Sweat Equity Agreement

"I need a Sweat Equity Agreement for a senior software developer who will receive 5% equity in my Irish tech startup, vesting over 4 years with a 1-year cliff, in exchange for developing our core product platform starting January 2025."

Document background
The Sweat Equity Agreement is a crucial document for early-stage companies in Ireland seeking to leverage expertise and services without significant cash expenditure. This agreement type is particularly valuable for startups and growing businesses that want to align service providers' interests with the company's long-term success. The document, governed by Irish law and compliant with the Companies Act 2014, outlines the exchange of services for equity ownership, including detailed vesting schedules, performance metrics, and protection clauses for both parties. It's commonly used when engaging consultants, advisors, or key personnel who believe in the company's potential and are willing to accept equity as compensation. The agreement must carefully balance the interests of existing shareholders while providing sufficient motivation for the service provider, all while ensuring compliance with Irish corporate, employment, and tax regulations.
Suggested Sections

1. Parties: Identification of the Company and the Service Provider

2. Background: Context of the agreement, including the company's business and the service provider's expertise

3. Definitions: Key terms used throughout the agreement

4. Services: Detailed description of the services to be provided

5. Equity Compensation: Details of the equity stake being offered, including number of shares, class of shares, and percentage of ownership

6. Vesting Schedule: Timeline and conditions for the vesting of equity

7. Service Provider's Obligations: Commitments, responsibilities, and performance standards

8. Company's Obligations: Company's commitments regarding equity issuance and support

9. Representations and Warranties: Standard declarations by both parties

10. Confidentiality: Protection of company information and trade secrets

11. Intellectual Property Rights: Ownership and transfer of IP created during the service period

12. Term and Termination: Duration of the agreement and circumstances for termination

13. General Provisions: Standard boilerplate clauses including governing law, notices, and entire agreement

Optional Sections

1. Non-Competition: Restrictions on competing activities, recommended when the service provider will have access to sensitive business information

2. Non-Solicitation: Restrictions on soliciting employees or customers, useful for service providers in client-facing roles

3. Board Observer Rights: Rights to attend board meetings, relevant for significant equity stakes

4. Tag-Along Rights: Rights to participate in future sale of shares, important for substantial equity positions

5. Drag-Along Rights: Company's right to force service provider to sell shares, useful for future company sale scenarios

6. Tax Provisions: Specific tax treatment and obligations, important when complex tax implications exist

7. Employment Status: Clarification of independent contractor vs. employee status, important when relationship status needs explicit definition

Suggested Schedules

1. Schedule 1 - Services Description: Detailed scope of services to be provided

2. Schedule 2 - Vesting Schedule: Detailed breakdown of vesting timeline and milestones

3. Schedule 3 - Share Details: Specific information about the shares including class, rights, and restrictions

4. Schedule 4 - Performance Metrics: Specific KPIs or performance standards if applicable

5. Schedule 5 - Company Capitalization Table: Current and post-issuance capitalization structure

6. Appendix A - Share Certificate: Pro-forma share certificate

7. Appendix B - Board Resolution: Copy of board resolution approving the equity issuance

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions


































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Relevant Industries

Technology

Software Development

Financial Services

Professional Services

Healthcare

E-commerce

Media & Entertainment

Biotechnology

Clean Energy

Manufacturing

Consulting

Real Estate

Education Technology

Digital Marketing

Artificial Intelligence

Relevant Teams

Legal

Human Resources

Finance

Executive Leadership

Board of Directors

Corporate Development

Company Secretariat

Relevant Roles

Startup Founder

Technical Co-founder

Chief Technology Officer

Software Developer

Business Development Consultant

Marketing Strategist

Financial Advisor

Product Manager

UX Designer

Operations Director

Sales Executive

Content Strategist

Technical Architect

Data Scientist

Strategic Advisor

Industry Expert

Growth Hacker

Digital Marketing Specialist

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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