The legal fate of promises made before the company exists is the most corrosive theme in startup disputes. “Thirty per cent will be yours”, “you are the CTO”, “we will move the code into the company” — the moment an investment round arrives or a founder leaves, these sentences turn into problems of proof. Almost all of them share a single antidote, one document signed before incorporation: the founders’ agreement.
In the field, though, teams spend months on the product, the brand, even the investor deck, but give the text governing their own relationship either no time at all or a two-page template found online. Yet the cost of this agreement is a few hours of honest conversation and a reasonable amount of drafting; the cost of its absence, as we will show, is measured in years of litigation.
What is a verbal understanding worth in court?
The technical answer: something, but at a high price. Under Turkish law contracts are, as a rule, not subject to form; an oral agreement binds. The problem is not validity but proof. Years later, you find yourself reconstructing the content of an equity promise, its conditions and what the parties actually meant, out of chat logs, emails and witnesses. The court weighs that evidence; the process stretches into expert reports and appeals, and the outcome is uncertain for both sides.
Litigation practice shows two typical victims of that uncertainty. The first is the early contributor who received no shares at incorporation and was told “we will sort it out later”: once the company is worth something, they hold a legally weak promise and an economically large expectation. The second, conversely, is the company itself: a team member who left early returns with an equity claim built on verbal promises, and that claim becomes a due diligence finding in the middle of a funding round. A written founders’ agreement closes both scenarios in advance.
Equity split need not be equal, but it must be reasoned
An equal split is most teams’ default, because bargaining is uncomfortable. Yet a large share of the teams that split equally discover within two years that the contributions were never equal. The right question at the drafting stage is not “who gets how much” but “who commits to what”: who is full-time, who brings the intellectual property, who puts in capital, who opens their network. When the split is written as the consideration for those commitments, the future “I worked harder” argument runs into the balance recorded in the contract, and stops there.
The full-time commitment deserves particular attention here. A founder keeping a salaried job and contributing “in spare time” is understandable at the earliest stage; but the reflection of that status in the split, and the obligation to go full-time by a fixed date, must be written down. Where they are not, the part-time founder and the founder who has bet everything on the company end up with identical stakes, and that asymmetry lights the fuse of the team’s first real crisis.
Why accepting vesting on your own shares is rational
The most critical mechanism in a founders’ agreement is vesting. The logic is simple: founder equity is consideration for future work, not for a past idea; if the work does not come, a proportionate part of the equity should come back. The usual structure ties the shares to a schedule and lets the company or the remaining founders repurchase, at a pre-agreed price, whatever an early leaver has not earned; this is known as reverse vesting. The schedule typically spreads over a few years and opens with a waiting period (the cliff) during which no shares count as earned; the periods vary from team to team, but the logic never does: equity is earned in proportion to the time stayed and the work delivered.
Founders resist the clause at first: “Why should I put my own shares at risk in my own company?” The answer sits across the table. Vesting does not discipline you; it disciplines the co-founder who leaves before you do, and someone departing at the end of year one yet remaining a full permanent shareholder works against everyone who stays and keeps building. Investors will demand this structure anyway; building it on your own terms at incorporation always beats building it on the investor’s terms at term sheet stage. Differentiating the repurchase price by the nature of the departure is done through the good leaver / bad leaver distinction.
Until the IP moves, the company owns nothing
An early-stage venture’s only real asset is usually the code, the designs, the brand — intellectual products created personally by the founders before incorporation. The critical point: incorporation does not transfer these assets to the company by itself. Under the Turkish copyright regime, economic rights in a work arise in the person who created it, and their transfer requires a written instrument. The founders’ agreement must therefore record the transfer of all pre-incorporation work product to the company, together with an undertaking to execute proper assignment documents once the company exists; in practice this is completed with a PIIA-type assignment agreement. The scope of the transfer must be drawn correctly too: not just the code, but design files, domain names, social media accounts, data sets and the contracts covering work commissioned from third parties all belong in the chain.
This is not abstract tidiness. One of the first questions in any investor due diligence is whether the IP chain is complete; a former founder who wrote the code but never signed an assignment is a risk item that resurfaces in every financing and every exit conversation. Confidentiality obligations and a reasonably scoped non-compete belong in the same framework; their limits are contested enough to deserve an article of their own, but leaving them entirely unwritten is the worst available option.
Write the separation scenarios while relations are good
The essence of a founders’ agreement is scripting, in advance, the scenarios nobody wants to see happen. The minimum list is settled:
- Voluntary departure: with what notice period the exit happens, and what portion of the shares is repurchased at what price.
- Removal: which concrete grounds (breach of commitments, prolonged failure to contribute, dishonest conduct) trigger removal, and by what majority the decision is taken.
- Deadlock: in an equally split team, which mechanism (a third-party referee, a pre-agreed buy-sell formula) unties the knot when the founders cannot agree.
- Transfer restrictions: whose consent a transfer to third parties requires, and whether the other founders hold a right of first refusal.
What happens when these scenarios go unwritten is a story of its own; the short version is that the separation turns from a legal process into a war of attrition, fought through blocked accounts, disputed commits and duelling notices.
What becomes of this document once the company exists?
The founders’ agreement is not discarded at incorporation; it evolves. Part of the arrangement migrates into the articles of association, while the part that should stay contractual typically matures into a fuller shareholders’ agreement (SHA); at the first investment round, the investor then layers its own documents on top of that structure. A well-drafted founders’ agreement, as the first link in this chain, makes every later negotiation easier, because the balance between the founders has already been struck and written down.
To sum up: a founders’ agreement records a team’s professionalism; it has nothing to do with distrust. Tie roles and the equity split to commitments, start the vesting schedule on day one, put the transfer of pre-incorporation intellectual property in writing, script the separation and deadlock scenarios while relations are good, and let the document evolve into an SHA alongside the company. Those few pages are the cheapest and most effective set of legal decisions your team will ever make.
Sources. Turkish Code of Obligations No. 6098, Turkish Commercial Code No. 6102 and Law on Intellectual and Artistic Works No. 5846. Statute links open the official Turkish texts on mevzuat.gov.tr.
This article is provided for general information only and does not constitute legal advice. Please seek legal support for an assessment of any specific matter.
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