Awake Venture Memorandum of Understanding

Awake Venture Memorandum of Understanding

MEMORANDUM OF UNDERSTANDING

Venture: [REQUIRED: VENTURE NAME] (the “Venture”)

Partners: [REQUIRED: PARTNER 1 FULL LEGAL NAME]; [REQUIRED: PARTNER 2 FULL LEGAL NAME][OPTIONAL: ; [REQUIRED: PARTNER 3 FULL LEGAL NAME]] (each a “Partner”)

Effective date: [REQUIRED: EFFECTIVE DATE] · Outside date for definitive agreements: [REQUIRED: OUTSIDE DATE]

1. Intent. The Partners intend to build [REQUIRED: ONE SENTENCE — WHAT THE VENTURE MAKES, FOR WHOM, AND THE PROBLEM IT SOLVES]. This memorandum records what they have agreed in principle so that definitive agreements can be drafted from it.

2. Structure. The Venture will operate through [REQUIRED: ENTITY NAME], a [REQUIRED: ENTITY TYPE AND JURISDICTION — e.g., Delaware corporation; California limited liability company] to be formed by [REQUIRED: FORMATION DATE]. Each Partner will hold their interest [SELECT ONE: directly / through a founders' holding vehicle]. Initial capital: [REQUIRED: AMOUNT AND WHO CONTRIBUTES IT, OR “NONE”]. [COUNSEL: confirm entity type and jurisdiction against tax treatment, equity-compensation plans, and investor expectations before formation.]

3. Equity. Founding equity, fully diluted, before outside investment:

Vesting commences [REQUIRED: VESTING START DATE]. Acceleration: [SELECT ONE: none / single-trigger on change of control / double-trigger on change of control and involuntary termination]. Dilution from future financings is borne pro rata by all Partners unless they unanimously agree otherwise. [COUNSEL: equity issued for services or subject to vesting carries tax and filing consequences, including time-sensitive elections.]

4. Other compensation. Beyond equity, the Partners intend:

5. Roles and responsibilities. Each Partner is individually accountable for their column and holds day-to-day authority within it:

Decisions outside a Partner's own column require [SELECT ONE: unanimous / [REQUIRED: THRESHOLD]%] written approval, including: spending above [REQUIRED: AMOUNT]; hiring; raising capital or incurring debt; issuing equity; changing the business or this memorandum; entering any contract above [REQUIRED: AMOUNT]; and selling the Venture. Deadlock: [REQUIRED: e.g., escalate to a named neutral adviser within 15 days].

6. Intellectual property. All work created for the Venture is intended to belong to the entity, and each Partner will sign an invention-assignment and confidentiality agreement at formation. Background intellectual property each Partner brings: [REQUIRED: LIST, OR “NONE”], which remains that Partner's and is licensed to the Venture [SELECT ONE: perpetually and royalty-free / on terms to be agreed in the definitive agreements].

7. Exit intent. The Partners record the following shared intention and will build toward it:

8. Definitive agreements. The Partners intend to sign, by the outside date above: entity formation documents; a founders' or operating agreement; equity purchase documents with the vesting in Clause 3; invention-assignment and confidentiality agreements; and [OPTIONAL: ADDITIONAL DOCUMENTS; OTHERWISE DELETE]. If those are not signed by the outside date, this memorandum expires unless the Partners extend it in writing.

9. Binding effect. Clauses 1 through 8 record intent only and are not legally binding. No Partner may sue on them, and no obligation to form the Venture, contribute capital, transfer property, or issue equity arises until definitive agreements are signed. The following are intended to be legally binding and to survive expiry or termination:

9.1 Confidentiality. Each Partner will keep the other Partners' non-public information, and the existence and contents of this memorandum, confidential for [REQUIRED: PERIOD] and use it only to evaluate and pursue the Venture.
9.2 Exclusivity. Until the outside date, no Partner will pursue, fund, or join a venture that competes with the Venture as described in Clause 1[OPTIONAL: , except: [REQUIRED: CARVE-OUTS]]. [COUNSEL: review scope, duration, and enforceability under the governing law, including limits on restraints of trade.]
9.3 Costs. Each Partner bears their own costs, including legal fees, unless otherwise agreed in writing.
9.4 No partnership or employment. Nothing here creates a partnership, joint venture, agency, fiduciary, or employment relationship between the Partners, or authority to bind another Partner.
9.5 Governing law and disputes. This memorandum is governed by the laws of [REQUIRED: JURISDICTION]. Disputes will be resolved by [SELECT ONE: good-faith negotiation, then mediation, then the courts of [REQUIRED: VENUE] / good-faith negotiation, then binding arbitration seated in [REQUIRED: SEAT] under [REQUIRED: RULES]].
9.6 Whole understanding. This is the Partners' entire understanding on its subject matter, replaces prior discussions, and may be changed only in writing signed by every Partner.

10. Signed.