Sorry to hear it -- I'm sure it's eating away at you. I'm a founder who's had to do it too, in the past. It never gets easier; you just get better at it.
I agree with @steven2012's feedback. To add a few things:
1) I'd recommend you work with your attorneys to draft up a termination agreement that includes a severance package. I'd also recommend you cut a check and include it with the letter. When you sit them down to talk them through the agreement (individually), you can present check to them and ask them to sign it and take the check. You don't want to force them into signing anything, but you also do want to try to get it done cleanly and completely for the sake of the business moving forward. If they hesitate or say they want to review the terms later, or with an attorney, don't push it. But do make the check large enough that it'll be easy for them to sign on the spot if at all possible -- you want to treat them fairly and not have to deal with loose ends later if you can help it.
2) It's extremely important to take the "one and done" deeper cut approach. There's nothing worse than everyone wondering when the other shoe is going to drop. I'd recommend you take the remaining team out to lunch and make sure they know that they are safe -- and you all have to rally together to make the company a success.
As an aside -- the only regret I've ever had is waiting to fire people that I knew had to go. Learning to be more aggressive about moving under-performers out faster has been one silver lining from the whole process, over time.
Good luck. It's a terrible foreboding feeling going into it, but you'll fee a big sense of relief afterwards, and if the employees you're letting go are unhappy in their jobs, they may end up thanking you later for helping them move on to find something they loved more.
Try not to make people sign anything the same day you lay them off, and definitely don't put a check in front of them like you're trying to entice them.
Unfortunately enticement is literally the purpose of the check. You're required to exchange value in order for them to agree to not sue the company. When I had to do my first firing I was surprised that this was the case but our lawyers insisted that we had to offer someone thing of value (can be a check or shares) in exchange for signing a termination document.
As for getting them to sign the same day, don't drag anything out. Just get it over with so both parties can move on. It's a terrible experience on both sides (unless one side is an asshole or doesn't care about the company.)
Unfortunately enticement is literally the purpose of the check. You're required to exchange value in order for them to agree to not sue the company. When I had to do my first firing I was surprised that this was the case but our lawyers insisted that we had to offer someone thing of value (can be a check or shares) in exchange for signing a termination document.
In contract law, the general term for that concept (i.e. each party being required to "give" something for the contract to bind) is consideration, and it derives from common law.
For example, if I contract you to build my company a web app, my consideration is the agreed payment, and your consideration is delivery of the web app as agreed.
This is also presumably why those tech CEOs who work for a "$1" annual salary aren't just doing it for $0 instead. Because, traditionally, for an employment contract to be valid, there must be consideration from both parties (the employee gives their labour, the company pays the salary).
The exact rules depend upon the jurisdiction, and nature of the specific situation. Some legal systems don't even require it at all.
There are a number of comments saying things like, "get them to accept the check on the spot," "entice them to sign the severance agreement quickly," "make sure they sign it fast before they change their minds and get a lawyer," etc. This is bad advice.
It is true that you should get them to sign an agreement that contains, among other things, a "general release" that basically says that they promise not to sue you for any reason. It is also true that to be enforceable, you must give something of value (i.e., "legal consideration"), and the severance pay is usually the principal consideration for such an agreement.
I would be extremely cautious, however, about getting someone to sign quickly. It seems to make sense on the face of it (get them to sign away their right to sue before they contemplate getting an attorney). But there is a flip side that no one is mentioning. If you shock someone by calling them into your office and telling that they're losing their job, put a legal document in front of them that they probably won't completely understand (it's going to have a laundry-list of statutory provisions that they need to expressly waive), put a check in front of them and say "here, sign this now!" you're going to unnecessarily jeopardize the enforceability of the release. The ex-employee's lawyer will argue that it was signed under duress and without sufficient knowledge, understanding and consent to constitute a valid waiver of the right to pursue certain claims.
Also, depending on the worker's age, there might be additional complications. The Older Worker's Benefit Protection Act applies to employees over 40, and requires the terminated employee be given 21 days to consider the release and 7 days afterward to change their mind. (The 21 days increases to 45 if there are two or more employees being terminated.) Although this particular statutory requirement doesn't apply to those under 40, it underscores the notion that allowing someone to consider a severance agreement for some amount of time and have the opportunity to discuss it with their own attorney if desired are both good things when it comes to enforcing the agreement. How long you give them is a matter of balancing numerous statutory and common law considerations (both state and federal) with the goal of getting them to sign quickly, and there are avenues, regardless of age, for their attorney to attack the validity of the release if they sign it without properly understanding and consenting to its terms.
I should also point out that severance agreements should always be prepared by an attorney. There are numerous considerations that vary state-to-state; there are specific waivers that need to be contained in them; there are different rules depending on the number of employees; possible notice requirements (in which case the severance might be designated as compensation in lieu thereof); rules about timing of final payments; whether or not benefits are paid out; etc.
I agree with @steven2012's feedback. To add a few things:
1) I'd recommend you work with your attorneys to draft up a termination agreement that includes a severance package. I'd also recommend you cut a check and include it with the letter. When you sit them down to talk them through the agreement (individually), you can present check to them and ask them to sign it and take the check. You don't want to force them into signing anything, but you also do want to try to get it done cleanly and completely for the sake of the business moving forward. If they hesitate or say they want to review the terms later, or with an attorney, don't push it. But do make the check large enough that it'll be easy for them to sign on the spot if at all possible -- you want to treat them fairly and not have to deal with loose ends later if you can help it.
2) It's extremely important to take the "one and done" deeper cut approach. There's nothing worse than everyone wondering when the other shoe is going to drop. I'd recommend you take the remaining team out to lunch and make sure they know that they are safe -- and you all have to rally together to make the company a success.
As an aside -- the only regret I've ever had is waiting to fire people that I knew had to go. Learning to be more aggressive about moving under-performers out faster has been one silver lining from the whole process, over time.
Good luck. It's a terrible foreboding feeling going into it, but you'll fee a big sense of relief afterwards, and if the employees you're letting go are unhappy in their jobs, they may end up thanking you later for helping them move on to find something they loved more.