Founders’ Activities

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​Definition​ A founders’ activities provision in a term sheet specifies that founders must spend 100% of their professional time on the company. If a founder wishes to work on another project, they must get approval from the company’s board. This provision may also require a founder who leaves the company but retains shares with voting rights to use their vote(s) to match the balance of votes cast by other shareholders. In effect, this would prevent a founder who leaves from continuing to make decisions for the company.