How can I avoid being screwed by my co-founder

In addition to having a strong contracts between partners, I usually try to apply the following rules (totally or partially, depending on your case). They can be a part of the contract.

• It's clear who is the CEO. There is no two CEOs.
• It's clear who will do what. Make lists.
• It's clear what will happen in case of unresolvable conflicts (see below).
• It's clear who owns the company (optional). Sometimes having one of the co-founder to control the company trough shares can help (51%-49%).

The most appropriate method is the ability to define, by contract, how a partner "exit" the company in case it's necessary. The method I used successfully in the past is the following:

• One partner triggers the process. Let's say it's Partner A.
• Partner A, that triggered the process, makes an offer to Partner B to buy his shares.
• Partner B has 2 weeks to either: 1. accept the offer and sell his shares to Partner A. (or) 2. buy the shares of Partner A for the exact same price as his proposal.

This system has two advantages:

• It forces partners to make fair proposals.
• Having to think 2 weeks sometimes helps conflicts to resolve by itself. Work well with impulsives entrepreneurs (entrepreneurs are known to be impulsive).

Here are two additional useful resources:

• The Art Of Partnering (Guy Kawasaki)
• The Art Of Partnering (e-Myth)

Hmnn, honestly, your post reads like a red flag to me.

I fear [..] my co-founder is going to screw me

Can you make your thoughts and feelings about this clearer to yourself?

On a very high level, my immediate gut reaction is:

• If you fear so because your gut feeling / sixth sense is saying your partner is dishonest: Don't partner with him. Seriously, launching a startup together is a major undertaking, a little bit like a marriage, and you don't want to spend your best commercial years with a bad guy.

• If you fear so because of personal issues on your side of the table: Try to work it out with yourself, and put in reasonable protections in the shareholders' agreements etc. But be mindful of not scaring your partner away with too much negativity, keep a positive tone and focus on the mutual benefit & growth.

Regarding how to protect against this, @Pierre 303 already has good pointers for you. But it's a very comprehensive subject, and there is no single way to do it that is 'best' or always works. Some pointers:

• Once you have been awarded shares, you cannot lose these again, short of criminal negligence or senility on your part. You can however see that the company looses parts of its customers to a competing business set up by your partner, etc. So you need non-competition clauses.

• The two classical documents to make when creating a company are the company bylaws and a shareholders' agreement.

• A good lawyer in your country, who is specialized in company formation and helping entrepreneurs / startup companies, will have seen all this before. Go get qualified advice from such a lawyer.

I think the time-appropriate phrase is that you're afraid you're going to be Zuckerburged.

You need to get a partnership agreement in place that outlines a) how the partnership can be disbanded (Pierre 303's response is one such clause) and b) vesting schedules for the both of you.