A Common Stock Purchase Agreement without Vesting sets forth the terms under which founders and early contributors may purchase their shares of Common Stock in your startup. This agreement is sometimes referred to as a “Founder Stock Purchase Agreement” if the stock purchaser is one of your startup’s founders. Until founders officially purchase stock, for legal purposes your startup has no owners or stockholders.
A recipient/purchaser of shares of Common Stock under this agreement can pay for these shares with cash, by contributing intellectual property to your startup, by agreeing to cancel debt that your startup owes to him or her, by performing agreed-upon services for your startup, or by some combination of the aforementioned means. According to Delaware law, any of these means constitutes effective and valid compensation for shares of Common Stock, but if your startup was incorporated in another state, what is considered valid (or best practice) may be different. Shares of Common Stock under this agreement should be priced at fair market value – typically $0.0001 per share for a newly formed startup – and will often be subject to a right of repurchase clause (a “right of repurchase” allows your startup to repurchase the issued shares of Common Stock under certain conditions).
Under the Common Stock Purchase Agreement without Vesting that SmackDocs generates for you, your startup has a right to repurchase the recipient’s shares of Common Stock should he or she attempt to sell these shares to a third party. However your startup’s repurchase price will not be the original issuing price per share. Instead it must match whatever price the third party was prepared to offer.