Startup Employment Contracts: What to Include (and Why It Matters)

Employment contracts set expectations, define roles, and protect your IP and confidential information. Even simple contracts should be clear, comprehensive, and legally sound.

Why it Matters

An employment agreement protects both your startup and your team.

It sets clear expectations on role, compensation, IP rights, confidentiality, and termination — and is often a key diligence document for investors.

Founders Checklist

Define role, reporting structure, and start date
Outline compensation: salary, equity grant, and benefits
Include at-will employment language
Add clear IP assignment and confidentiality clauses
Ensure signature of CIIA (Confidential Information and Invention Assignment)
Store a fully executed copy in the employee’s legal file and data room

Founder Fails

Didn’t include IP assignment > engineer left and claimed code ownership
Used ambiguous equity language > misalignment on options vs RSUs
Forgot at-will language > wrongful termination exposure
Never countersigned > agreement may not be enforceable

When to ask for Help

Before issuing your first offer letter
If customizing terms for executive or technical hires
When including equity, IP, or non-compete clauses
If you're unsure what terms are enforceable in your state
Before terminating someone under contract

Frequently Asked Questions

Q: Do I need a full contract if it’s just a verbal offer and offer letter?
A: Yes. Offer letters are important, but they don’t cover IP rights, at-will status, or confidentiality — which are critical in legal disputes and M&A due diligence.

Q: Can I use a generic template?
A: You can start there, but adjust it for your state’s laws and your equity terms. Make sure it aligns with any offer letter sent.

Q: What’s the difference between a CIIA and an NDA?
A: CIIA includes confidentiality plus an assignment of all IP created while employed — far more important than a standalone NDA for startups.

Q: What if the employee is remote or international?
A: Employment laws vary. Use local counsel or a PEO (like Deel, Remote.com, Oyster) if you're hiring across borders.