dear founder...

One of the fastest ways to destroy a promising startup is to assume that everyone has the same expectations about money.

They don’t.

And nothing exposes this faster than salaries and compensation.

This is why founders must legally define how and when cofounders will be compensated  right from the beginning. Not when the business starts making money… not when “we figure things out” … from day one.

Because here’s the reality In early-stage startups, many cofounders agree to forgo salaries until the business becomes profitable. But if this expectation is not clearly discussed and documented, resentment begins to grow.

One person feels they’re sacrificing more.

Another feels they’re being used.

Another assumes money is coming soon.

The truth? It was never defined in the first place.

And then there’s profit sharing.

If profits will be shared, how, when, and on what basis?

You need a legal agreement that clearly states the formula, the timeline, and the rules. Otherwise, when money finally comes in, instead of celebrating, you’ll be settling disputes.

A startup can survive competition, turbulence, and even temporary failure…

But it cannot survive financial ambiguity between cofounders.

Talk about it.

Agree on it.

Document it.

Clarity is not awkward but it’s an important protection of interest.

I hope you found this helpful!

Reach out if you need any help with the legal aspect of your business.

To your #legalsense

#barinaadalegal

#staruplegal