Buy-Sell Agreements Explained for Startup Founders
A buy-sell agreement says who can buy a founder’s shares, at what price method, and when.
Without funding, the paper often fails when someone dies and the remaining owners need cash to close.
Key takeaways
- 01
Confirm valuation method, death and disability triggers, and transfer steps match your current cap table and investor rights.
- 02
Fund the purchase with life insurance sized to today’s ownership and a realistic company value, reviewed with counsel.
- 03
Revisit after financings, founder exits, or major role changes. Stale agreements create the same chaos as having none.
- 04
Stead Life places buy-sell insurance. Your attorney drafts and updates the agreement itself.
In this guide
- Confirm valuation method
- Fund the purchase with life insurance sized to today’s ownership and a realistic company value
- Revisit after financings
- Stead Life places buy-sell insurance
Recommended next step
Buy-Sell InsuranceSee how Stead Life builds this into a lifelong insurance relationship.Continue learning