When you're first contemplating launching a new startup, it's not unusual to put in quite a bit of time and effort into testing the concept and developing prototypes before incorporating a new legal entity. Mix in the uncertainty of working with co-founding partners that you don't know very well and misunderstandings can rise up quickly. This proven Memorandum of Understanding (Letter of Intent) document template has protected my interests as the Founder of my companies, as well as those of my prospective Co-Founders. How? It provides a way for all parties to go their own ways in an amicable fashion in case the partnership is not working out, before the new venture is incorporated. It also contains non-binding language that allows you to specify how equity split in the new venture is planned once the company paperwork is filed, with vesting.
Please note: I believe that starting off with accurate, proven document templates should help you save a lot of money in legal fees. But this SAMPLE template is not a substitute for personalized advice from a knowledgeable lawyer. Always have your attorney review, discuss and approve these documents before using them in your business.