| HBS Case Collection
(Revised February 2014)
Crafting a Founder Agreement at HealthCraft
HealthCraft's three founders are about to craft their founding agreement and split the equity among themselves. Uncertainty lingers over each member's future contributions, though—how is the team to devise a durable and effective split? Ever since consultant Kevin Rumsfeld conceived of the idea for HealthCraft, he had worked resolutely to begin building the company by recruiting a talented colleague to help with marketing and fundraising, and a junior member of one of his project teams to help him build the product. All three had been enthusiastically working on HealthCraft part-time for the last few months, contributing from personal savings to build a prototype. But now the pressure is on to discuss and finalize a founding agreement. What should they include in the agreement, and how should they structure their equity split?