Practical examples of non-compete agreement examples for startups

Startup-focused examples of non-compete agreement examples for startups

Instead of starting with theory, let’s look at how early-stage companies actually use non-compete language.

A pre-seed SaaS startup in California, for example, usually does not put non-compete clauses in standard employee offer letters because California law makes most employment non-competes unenforceable. Instead, they lean hard on NDAs and invention assignment agreements. But that same founder might move their co-founder separation agreement under Delaware law with a limited non-compete tied to equity vesting and investor requirements.

By contrast, a seed-stage B2B startup in Texas may include a one-year, narrowly tailored non-compete for sales executives covering direct competitors in the same industry. These are the kinds of real examples of non-compete agreement examples for startups that actually survive basic legal scrutiny: short time periods, tight geography (or defined customer lists), and clear definitions of what counts as a competitor.

The pattern: the more senior and strategic the role, the more likely you’ll see a carefully drafted non-compete, and the more junior or technical the role, the more you’ll see non-solicitation plus confidentiality instead.

Best examples of non-compete clauses for early-stage startup employees

When founders ask for examples of non-compete agreement examples for startups, they usually mean: “What do other startups actually put in their contracts for employees?” Here’s how this typically looks in practice across different roles.

Example of a non-compete for a startup sales leader

A Series A SaaS company hiring its first VP of Sales might use language along these lines:

“For a period of twelve (12) months following the termination of your employment for any reason, you agree not to directly compete with the Company by accepting employment with, advising, or owning more than 2% of any business that (a) develops or sells cloud-based customer support software; and (b) targets enterprise customers with more than 1,000 employees, in any U.S. state where the Company has paying customers during the last twelve (12) months of your employment.”

Why this is one of the better examples of non-compete agreement examples for startups:

• It limits the time (12 months, not 3–5 years).
• It limits the scope (enterprise customer support SaaS, not “any tech company”).
• It limits the geography in a modern way (states where the company actually has customers).

Courts in many states look for this kind of tailoring when deciding whether to enforce a non-compete.

Example of a non-compete for a technical founder exiting the company

Now consider a technical co-founder who’s leaving but keeping some vested equity. The board and investors may insist on a stronger non-compete than they’d ever use for a regular employee:

“For a period of twenty-four (24) months following the date you cease to provide services to the Company, you shall not, directly or indirectly, found, control, or advise any business whose primary product is a machine-learning fraud detection platform for online payment processors, anywhere in North America or the European Union.”

This example of a non-compete focuses on:

• The primary product (fraud detection for payment processors).
• A longer term (24 months) justified by the founder’s deep knowledge and strategic role.
• A broader territory (North America + EU) tied to where the startup actually operates.

Even for founders, this kind of clause has to be anchored in legitimate business interests—protecting trade secrets, customer relationships, and substantial investments in R&D.

Real examples of non-compete agreement examples for startups in different industries

The best examples of non-compete agreement examples for startups are not one-size-fits-all. They’re shaped by the business model, location, and how easy it is to walk out the door with something truly sensitive.

SaaS and AI startups

For SaaS and AI companies, non-competes often focus on:

• Specific problem domains (e.g., fraud detection, HR analytics, supply chain optimization).
• Customer segments (mid-market vs. enterprise, healthcare vs. e-commerce).
• Access to proprietary models or datasets.

A realistic clause for a senior ML engineer in a non-California state might say:

“For six (6) months after your employment ends, you will not develop or manage development of machine-learning models that predict employee attrition for companies with more than 500 employees, for any business whose primary product competes with the Company’s employee retention analytics platform.”

Notice this is shorter (6 months) and tightly focused on a niche product space, which makes it more defensible.

Biotech and medtech startups

Biotech startups frequently push for stronger restrictions because the IP is heavily regulated and expensive to develop. A non-compete for a senior scientist might center on a specific therapeutic area or platform technology, not “all biotech.”

For example:

“For eighteen (18) months after termination, you will not perform research or product development on mRNA-based vaccine platforms targeting respiratory viruses for any company that competes with the Company in the United States.”

This type of clause is more likely to be seen as protecting genuine trade secrets and long-cycle R&D rather than just blocking someone’s career.

Local service and marketplace startups

A local food delivery or home-services marketplace might frame non-compete language around geographic radius and customer lists. For instance, a city-focused cleaning marketplace could say:

“For nine (9) months following termination, you will not own, manage, or work for any online marketplace that connects residential cleaners with customers within a 25-mile radius of Austin, Texas, if that marketplace targets the same customer segments as the Company.”

This kind of example of a non-compete is very common in brick-and-mortar or geo-limited businesses, and courts tend to care a lot about whether the radius and duration are reasonable for that market.

Examples include non-compete language for contractors, advisors, and interns

Founders often forget that non-compete risk doesn’t stop with full-time employees. Some of the most sensitive access is given to contractors and advisors.

Advisors with deep industry connections

A fintech startup might bring on a former bank executive as an advisor. Their agreement could include:

“During the advisory term and for twelve (12) months thereafter, you will not advise or serve on the board of any company whose primary business is providing real-time payment routing software to U.S. regional banks.”

This is one of the best examples of non-compete agreement examples for startups using advisory roles: narrow, industry-specific, and clearly tied to the advisor’s strategic value.

Contractors with code or data access

For a contractor building a critical payments integration, the agreement might say:

“For six (6) months after the end of this engagement, you will not provide software development services to any business that (a) uses substantially similar payment routing architecture; and (b) targets the same top 50 customers identified in Exhibit A.”

This protects both architecture and specific named accounts without trying to wall off an entire career field.

Interns and junior staff

Most startups do not use non-competes for interns or junior technical staff, especially in states hostile to non-competes. Instead, they rely on:

• Confidentiality agreements
• IP assignment agreements
• Internal security and access controls

When non-compete language appears at this level, it’s usually limited to direct solicitation of customers or employees, not broad industry bans.

2024–2025 legal trends affecting examples of non-compete agreement examples for startups

Any discussion of examples of non-compete agreement examples for startups in 2024–2025 has to factor in the regulatory climate.

Federal Trade Commission (FTC) developments

In 2023–2024, the U.S. Federal Trade Commission moved toward significantly restricting or banning many employment non-competes. Litigation and political shifts mean the final landscape is still evolving, but the direction of travel is clear: broad non-competes for regular employees are under heavy scrutiny.

You can track updates directly from the FTC at:

• https://www.ftc.gov

Founders should expect:

• More pressure to justify non-competes with specific, legitimate business interests.
• Greater emphasis on non-solicitation and confidentiality as alternatives.
• Increased employee willingness to challenge overbroad clauses.

State-level divergence

U.S. states are not aligned on this topic:

• California, North Dakota, Oklahoma: employment non-competes are largely banned. California has even tightened rules around out-of-state agreements that affect California workers.
• Washington, Massachusetts, Illinois: often require minimum salary thresholds and limit duration (commonly 12 months or less).
• Texas, Florida, New York (pending reforms): still allow non-competes but push for reasonableness in scope, time, and geography.

The upshot: the same text that’s enforceable in Texas may be void in California. When you look at examples of non-compete agreement examples for startups online, always read them through the lens of which state’s law applies.

For neutral background on labor market impacts of non-competes, see research from:

• U.S. Department of Labor: https://www.dol.gov
• National Bureau of Economic Research (NBER): https://www.nber.org

How startups actually balance non-compete, non-solicit, and NDA terms

Many of the best examples of non-compete agreement examples for startups don’t rely on non-competes alone. Instead, they stack three tools:

• Non-disclosure agreements (NDAs): prevent misuse of confidential information and trade secrets.
• Invention/IP assignment: ensures code, designs, and inventions created on the job belong to the company.
• Non-solicitation clauses: stop ex-employees from poaching customers or key staff for a competing venture.

In states where non-competes are hard to enforce, startups often lean heavily on non-solicitation. For example:

“For twelve (12) months after your employment ends, you will not, directly or indirectly, solicit or attempt to solicit any customer or prospective customer of the Company with whom you had material contact during the last twelve (12) months of your employment, for the purpose of offering products or services that are competitive with the Company’s.”

This kind of clause is often more enforceable and more targeted than a broad “you can’t work in this industry” provision.

For a deeper dive into trade secret protection, founders can review the U.S. Patent and Trademark Office’s resources:

• USPTO Trade Secret Policy: https://www.uspto.gov/ip-policy/trade-secret-policy

Practical drafting tips drawn from the best examples

Looking across the real examples of non-compete agreement examples for startups, a few patterns emerge that are worth copying when you sit down with your lawyer.

Define “competitive business” with precision

Vague: “any business that competes with the Company.”

Better: “any business whose primary product is subscription-based logistics optimization software for e-commerce retailers with annual online revenue over $10 million.”

The more specific your definition, the more likely a court is to see the restriction as fair—and the more likely a candidate is to sign it without panic.

Shorter is usually smarter

Most modern examples include terms between 6 and 18 months. Anything longer invites a fight, especially for non-founder employees. Courts increasingly view multi-year bans skeptically unless the role is very senior and the business need is well documented.

Tailor by role and location

A founder in a strategic role might have a 24‑month, product-specific non-compete. A regional sales manager might have a 12‑month, territory-specific non-compete. A junior engineer in California might have no non-compete at all, just NDA and IP assignment.

If you operate in multiple states, it’s common to:

• Use a single core template, and
• Add state-specific riders that modify or remove non-compete language as required.

Always pair non-competes with consideration

Many states require some form of consideration (value given in exchange) beyond just continued employment, especially when a non-compete is added after hire. Examples include:

• Equity grants
• Cash bonuses
• Promotions or new roles

Your lawyer should confirm what your governing law requires.

FAQs about examples of non-compete agreement examples for startups

What are some common examples of non-compete agreement terms for startup employees?

Common examples include:

• A 6–12 month restriction on working for direct competitors in the same product niche.
• A ban on soliciting the startup’s current customers or prospects for a year.
• A limit on joining a company that targets the same industry vertical and customer size, rather than all tech companies.

These examples of non-compete agreement examples for startups tend to focus on protecting customer relationships and trade secrets, not blocking someone from earning a living.

Can you give an example of a non-compete that is likely to be struck down?

An example of a risky clause would be:

“For five (5) years after your employment ends, you may not work for any technology company anywhere in the world.”

This is overbroad in time, geography, and scope. In many U.S. states it would either be unenforceable outright or heavily narrowed by a court. It also sends a terrible signal to candidates and investors who know the legal landscape.

Are non-compete agreements for startups enforceable in California?

In almost all employment contexts, no. California law generally bans non-competes for employees, and recent legislation has tightened enforcement against out-of-state agreements that impact California workers. Startups based in or hiring in California usually rely on NDAs, IP assignment, and non-solicitation instead of non-competes.

If you see online examples of non-compete agreement examples for startups that look attractive, do not assume they work in California without talking to counsel licensed there.

Should early-stage startups use non-competes at all?

For many early-stage startups, the better move is to:

• Use non-competes only for a small group of senior, strategic roles and founders, and
• Rely on strong NDAs, IP assignment, and non-solicitation for everyone else.

Overreaching with non-competes can hurt recruiting, spook senior hires, and create legal risk without adding much real protection.

Where can founders find more guidance on drafting enforceable restrictions?

You won’t find a single perfect template that fits every jurisdiction, but you can:

• Review research and policy discussions from the U.S. Department of Labor (https://www.dol.gov) and the FTC (https://www.ftc.gov) to understand enforcement trends.
• Look at trade secret guidance from the USPTO (https://www.uspto.gov/ip-policy/trade-secret-policy) so you know what you’re actually trying to protect.
• Work with a startup-savvy employment attorney who can adapt examples of non-compete agreement examples for startups to your state law and funding stage.

The bottom line: treat non-competes as a precision tool, not a default clause you copy from the last contract you saw. The best examples are narrow, thoughtful, and clearly tied to real business risks.