Startup Estonia has published the 2026 edition of its free model legal documents, the fourth revision of a template pack first released in 2017 and updated every three years since. Let's take a look at the latest updates...
The pack now runs to 30 templates and follows a company from incorporation to its first priced round:
- Founding team: a founders' agreement with matching articles of association in English and Estonian.
- Building the team: employment, management board member and advisor agreements, and an option agreement for employee equity.
- Protecting the business: IP assignment and licence agreements in a simple and a comprehensive version, and unilateral and mutual non-disclosure agreements.
- Raising money: term sheets and agreements for convertible loans from one or several investors, two post-money SAFEs, an equity investment term sheet and agreement, shareholders' agreements with and without a supervisory board with the corresponding articles in both languages, and a simple share purchase agreement.
- Working tools: a cap table model and a simplified one, a legal due diligence checklist and forms of spousal consent.
The pack is used across the Estonian tech scene, from companies founded last month to unicorns that raised on these templates from their first pre-seed round.
The 2026 rewrite was led by Ellex Raidla together with Cobalt, Triniti, Sorainen, PwC Legal, TGS Baltic and Eversheds Sutherland, supported by Njord and Walless, and promoted by Startup Estonia and EstVCA.
Most of the changes come from practice, not from new legislation. Three years of daily use showed where the templates had become tight, and the working group rewrote those parts first.
What changed
Options: fairer for part-timers, clearer on when options can be exercised
The option agreement got the biggest rewrite. Vesting now adjusts for part-time work: a team member who moves to 60% for a year vests at 60% for those months, keeps what has already vested, and the shortfall lapses instead of extending the vesting period.
When the option can be exercised is reframed. The 2023 template offered three triggers: an exit, after a fixed calendar date at least three years from grant, or death. The 2026 template gives the company a clear choice between two models. In the first, the option is exercisable only on an exit or liquidation. In the second, it is exercisable on an exit and, in addition, during a window that opens once no further shares can vest, whether because the vesting period has run its course or because the optionholder has left as a Good Leaver. That window never opens earlier than three years from grant and runs until the option's long-stop date, by default the tenth anniversary of the grant. The company can still narrow it for a Good Leaver by giving at least 30 days' notice.
The template also adds two alternatives to paying the exercise price in cash. With the company's consent, the exercise price can be settled in shares, so the optionholder receives fewer shares but pays only their nominal value. On an exit, the company may settle the option without issuing shares at all, deducting the exercise price and taxes from the sale proceeds.
A new rule is the Retrospective Bad Leaver. If within 12 months after someone's departure the company discovers pre-exit misconduct that would have made them a Bad Leaver, such as a material breach, a criminal conviction or material damage to the company, they are reclassified: the option lapses, any shares already acquired go back to the company free of charge, and any cancellation payment they received is repaid within 30 days. The same free call applies to a leaver who breaches post-termination confidentiality, non-compete or non-solicit obligations, even after vesting has ended.
Former founder concept
The new piece here is the Former Founder. Until now the templates named the founders and stopped there, so when a co-founder stepped back from the day-to-day, nobody quite knew what their status was. Now a founder whose role ends automatically becomes a Former Founder: they keep their shares, stay a party to the shareholders' agreement with the founder obligations that still make sense, and the cap table and articles are updated without a fresh round of signatures. The same logic runs through the shareholders', founders' and option agreements.
Non-compete
A non-compete is only worth as much as its enforceability, and restrictive covenants fail in court when they are vague or broader than the interest they protect. The 2026 non-compete and non-solicit clauses are therefore drafted with more precision on each element a court examines: duration, territory, the restricted activity and the consideration. Duration is now a single Restricted Period for both covenants: the term of the founder's management-level engagement plus 12 months after it ends, replacing a bracketed period that in practice was often tied to the founder's shareholder status. A Former Founder who retains control of the company remains bound until 12 months after that control ends.
Territory and scope are tied to the founder's actual involvement: the restriction extends to new markets only where the founder approved the expansion, whether by a board decision or in the course of their duties. A purely financial holding in another company, without a management role or material influence, is expressly carved out. Where the shareholders' agreement and the founder's service contract both restrict the same activity, the stricter provision prevails, but a contractual penalty for the same breach may be claimed only once. Where applicable law conditions a post-termination non-compete on compensation, the agreement now obliges the company to pay it, and a severability provision lets a court narrow a restriction rather than strike it out.
AI, cyber and sanctions
Founders should expect three new questions in their next round. The equity investment and convertible loan agreements add warranties on sanctions (no listed persons, no breaches or investigations in the past three years), cybersecurity (safeguards in place, no incident that had to be reported) and AI. The AI warranty comes in two sizes: a light one for companies that only use AI tools for internal productivity, and a full one for companies with AI in their product, covering lawful use, rights to the outputs and training data, and internal policies. Export control, anti-bribery and foreign direct investment clearance are optional extras. The legal due diligence checklist asks for the matching documents, so the data room can be prepared before the questions arrive.
The IP assignment agreements close the same loop on the team side. Nobody may put AI-generated code, text or images into what they deliver unless the company permits it, and they must disclose which tools they used. That keeps the company's IP clean when the next investor's lawyers go through it.
Raising the round
The equity investment agreement lets the company add investors after the first closing, by a deadline and up to a cap, on the same price and no better terms, without reopening the round.
The post-money SAFE, the convertible instrument Y Combinator standardised for US seed rounds and Startup Estonia adapted to Estonian law, is updated from YC's version 1.1 to version 1.2 and now comes in two forms, valuation cap or discount, instead of one template combining both.
New in the pack
- Simple share purchase agreement. A new template for secondary sales of existing shares, as opposed to the issue of new shares in a funding round. Typical uses include an early investor, a departing founder or an employee selling their shares to another investor. It is built for transfers that do not require a notary, which Estonian law allows where the company has waived notarial form in its articles. The template covers the usual conditions (waivers of the other shareholders' pre-emption and co-sale rights, the buyer's adherence to the shareholders' agreement, board approval and spousal consent), the closing steps, basic seller warranties and liability capped at the purchase price.
- IP assignment in two versions. The single 2023 agreement is replaced by two forms, chosen by who is signing. The simple form is for individuals: founders, employees, board members, advisors and freelancers. It assigns everything the person creates for the company under any professional relationship, whatever contract it rests on, and can reach back to a founder's work from before incorporation. The comprehensive form is for contractors and agencies working under a specific agreement. It keeps the fuller structure: work created for the company is assigned, the contractor's pre-existing IP is licensed, the company grants the contractor a limited licence to its own IP for the purpose of the engagement, and the contractor undertakes to bind its personnel and subcontractors to the same obligations. Both forms bar AI-generated elements from deliverables unless the company permits them and require disclosure of the AI tools used.
Smaller fixes follow the same logic. The IP clauses in the employment and board member agreements now reach back to work done before the contract was signed. Personal data clauses are gone from the employment, board member and advisor agreements. The spousal consent forms are shorter, and the cap table example follows the EUR 0.01 notional share used in the investment agreement.
Why every three years
"The model documents don't gather dust on a shelf. They are the everyday tool of Estonia's tech sector," says Antti Perli, partner at Ellex Raidla, who led the working group. "Some of our unicorns raised on these templates from their first pre-seed round all the way up. A tool in constant use shows where it needs sharpening, and this round of changes came straight from practice, from the places where the documents had become tight over three years. That is why updating them at least every three years is essential."
All documents are free to download at startupestonia.ee/model-documents.
Sources: the 2023 and 2026 versions of the Startup Estonia model documents; Startup Estonia model documents page.
Attorney Antti Perli is one of the most experienced venture capital and technology startup lawyers in Estonia. He advises clients on the formation of venture capital and private equity funds, venture capital and private equity transactions, founder, employee and management issues, the development of option programs, intellectual property, information technology and general business law issues, as well as other day-to-day matters.
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