As the cofounder of a startup, to protect your best interests should be a priority. No matter how friendly you are with the other members of the founding team, you have to look out for your own best interests. Otherwise, you could end up on the outside looking in.
Five Tips for Protecting Your Best Interests
As much as you may like to think other people are looking out for you, the reality is that you are the only person who is 100 percent focused on protecting your best interests. Thus, you’re the only one who can develop a strategy that keeps you safe from undue harm. Here are a few suggestions:1. Develop a Sound Founders’ Agreement
When starting a business with a cofounder, you should develop what’s known as a “founders’ agreement.” This is nothing more than a clear agreement between all founding partners about a number of key issues the company may face. It’s not necessarily a legally-binding contract, but it’s a nice baseline to keep everyone in check. Think of it as a negotiable document that provides a framework for the business, but that can be adjusted as time goes on.“If a founders’ agreement isn’t as legally binding as some other documents you’ll be dealing with, does that mean it’s less important? No, not at all,” entrepreneur Ben Rashkovich explains. “It might not be binding, but a well-done founders’ agreement will protect you in case of a dispute later on. You’ll be able to point back to the founders’ agreement to explain why you did this or why your co-founder shouldn’t have done that.”
