A Founder Assignment is an essential agreement for protecting your company’s intellectual property (IP) and ensuring that ownership rights are clearly defined. Here’s why you need them:
- Confidential Information and Invention Assignment Agreements (CIIAAs) only cover IP developed for the company in the future on a going forward basis.
- Your company also needs to own the IP that was contributed at the company’s founding. This is where a Founder Assignment comes in. Founder Assignments ensure that any IP created during the company’s early stages belongs to the company, not to the individual founders. Without these assignments, founders could retain personal ownership over core company IP, which could create conflicts later, or in the worst case, potential hold out situations with founders.
- Investors and acquirors will ask to see Founder Assignments to confirm that the company holds title to all of its IP. If these are not in place, it’s a common ask for investors/acquirors to demand retroactive assignments of IP from founders. This can be an issue when a founder has since departed the company.