When you think of business contracts, your mind probably goes straight to non-disclosure agreements (NDAs), employment agreements, or that 37-page lease with the paragraph about what happens if someone brings a goat into the building (yes, that actually happens). But if you've ever launched a startup, you know the real drama doesn't start until things get messy. And for that, there are shockingly few startup contracts that address the real chaos.
We're talking about the "co-founder breakup," the "angel investor from hell," and the "who gets the company dog" scenarios that plague so many ambitious founders. So, in the spirit of wishful thinking—and legal practicality—we've compiled a list of satirical-but-seriously-useful contracts that should exist (and where to find the real ones that get close).
1. The Founder Breakup Clause (a.k.a. The Startup Prenup)
Let's be real: Your co-founder relationship is more intense than most marriages. You're building a company together, making big financial decisions, and probably arguing over buying a Keurig or an espresso machine.
But unlike a marriage, there's no cultural norm to sign a shareholder agreement that outlines what happens if one of you ghosts the company to start a kombucha farm in Bali. That's where the founder breakup clause comes in.
Why This Contract Should Exist and What to Use
To protect everyone when things go south, whether it's a values clash, a personal emergency, or someone just gets tired of 14-hour days and ramen.
A real shareholder agreement (also called a founders' agreement or operating agreement for LLCs) does the job here. It defines ownership, vesting, exit scenarios, and more.
2. Investor Micromanagement Deterrent Agreement
You love your investors, until they show up in your Slack at 7 a.m. with unsolicited branding suggestions and 12 questions about last month's burn rate. This mythical business contract would kindly remind investors that while their money is welcome, their day-to-day interference is not.
Why This Contract Should Exist and What to Use
Because boundaries. And because not every investor understands the line between "supportive partner" and "Chief Executive Backseat Driver."
This is where the term sheet and board structure do some heavy lifting. Setting expectations for voting rights, board seats, and operational control is essential.
3. The Emotional Support Animal Clause (But for Founders)
Sometimes what your startup needs isn't another 10x engineer. It's a golden retriever named Steve who calms everyone down during fundraising. This clause would specify ownership of any pets "retained for emotional stability purposes" should the company dissolve or relocate.
Why This Contract Should Exist and What to Use
Because when the office gets shut down, someone will fight over Steve. Don't let it get ugly.
A simple IP and asset ownership agreement can clarify who owns what, including the quirky stuff.
4. The "Oops, We Forgot to Incorporate" Emergency Retroactive Contract
It's shocking how many startups raise money, build a product, and pitch to TechCrunch before formally incorporating. This phantom contract would let you retroactively declare, "Yeah, we were a real company back when we signed all that stuff."
Why This Contract Should Exist and What to Use
To avoid contract disputes, IP ownership nightmares, and lawsuits from early contributors who thought they were co-founders. Your best bet is incorporation documents (like a Certificate of Incorporation) and IP assignment agreements. Don't delay them.
5. The "Startup Burnout is Real" Wellness Pact
One report found that 72% of founders believe entrepreneurship has impacted their mental health. This agreement would guarantee founders at least one non-working weekend per month, a mental health stipend, and a mandatory no-slack-after-7 PM clause.
Why This Contract Should Exist and What to Use
Because the average startup founder generally works more than 40 hours per week, and burnout leads to bad decisions, poor morale, and sometimes serious mental health consequences. Thoughtful employment contracts for business or a founder pledge can define expectations around time off, workload, and mental health benefits.
6. The "We're Not Paying You in Vibes" Deferred Compensation Contract
Startups are famous for offering big dreams, tight budgets, and equity packages that "might be worth millions...someday." But here's the thing: landlords don't accept stock options. This is where the deferred compensation contract comes in.
Why This Contract Should Exist and What to Use
Not everyone can afford to get paid for "exposure," "vision," or "TBD seed round vibes." Especially in high-cost cities, team members often take below-market salaries, or no salaries at all, with a vague promise of backpay when the next check clears. That promise? It needs to be in writing.
A proper deferred compensation agreement sets expectations, such as wages owed, payment terms, and how liability affects future fundraising or exits. It's also crucial to comply with IRS Section 409A, which governs nonqualified deferred compensation plans and can trigger huge penalties if done wrong. It helps avoid the awkwardness of "Hey, remember when you said you'd pay me in Q2?"... six months later.
Business Contracts That Actually Exist—and You Really Need
Let's come back to reality for a moment. While these unicorn startup contracts may never materialize, the following agreements do exist and are essential for anyone launching a company:
Articles of incorporation or organization
Shareholder agreement or operating agreement
Employment agreements & offer letters
Confidentiality and IP assignment agreements
Equity vesting schedules
Term sheets and investor agreements
Customer terms of service and privacy policies
They may not be as flashy as the "investor chill clause," but they are the legal infrastructure that keeps your startup from crashing when real issues arise.
Final Thoughts: Satire Meets Sanity
It's easy to joke about startup drama, but beneath the humor is a real truth: Most early-stage founders don't have the legal protection they need until it's too late. Whether forgetting to formalize equity splits or underestimating how involved an investor might get, gaps in your business contracts can come back to haunt you.
So while we wait for someone to invent the "Founder Ego Management Protocol," take time to invest in the contracts for startups that do exist. Because your business might be built on code and coffee, but it runs on contracts.
Disclaimer
Bizee and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting professionals.
