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Shareholder agreements: five clauses founders skip
Drag-along rights, vesting, deadlock and exit valuation: the provisions that matter most when co-founders disagree.
Amara Lin
Partner · Corporate & M&A
Published
Reading time
8 min read
Most shareholder disputes we handle trace back to a clause nobody negotiated.
Most founders sign a shareholder agreement in the first month and never read it again. The clauses that matter only come alive when co-founders disagree.
Drag-along and tag-along rights
Decide now whether a majority can force a sale, and whether minority holders can join one on the same terms.
Vesting and leaver provisions
Founder shares should vest over time, with clear good-leaver and bad-leaver prices.
Deadlock
A 50/50 company needs a way out: a casting vote, mediation or a buy-sell mechanism.
Exit valuation
Agree the valuation method before anyone needs it, not after.
Commercial leases
Real Estate
New York
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Written by
Amara Lin
Good deals are built on documents that still make sense when people disagree.
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amara.lin@gravislaw.com
Legal disclaimer
This article is for general information and is not legal advice. Reading it does not create an attorney–client relationship. Lease terms and market practice change, so speak with a lawyer about your own circumstances before you sign. Prior results do not guarantee a similar outcome.
Amara Lin
Partner · Corporate & M&A
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