I noticed many aspiring founders jump into setting up a company without having a shareholders agreement or even a term sheet in place.
The usual excuse boils down to wanting to save money by not hiring a corporate lawyer. Sometimes you want to avoid dealing with the difficult conversations you need to have with your co-founders such as a clear division of labour and responsibilities. If you decide to take these risks, you should be ready to blame yourself too for losing your company if there is a shareholder dispute.
The worst thing you can do is to agree on a 50/50 split with someone you just met at a networking event to form a new company together. If both of you cannot agree on a business decision, there will be a deadlock. If you are no longer on talking terms, it will be impossible for you to sign a shareholders agreement then and it may further escalate when lawyers get involved.
Just like an insurance policy, a solid shareholder agreement in place can give you a peaceful night’s sleep, free from the worry and uncertainty that can arise from business disputes and disagreements.