Ask HN: Kicked out by co-founders – what are my options?
25 comments
I'm not a lawyer.
1. Run, don't walk, to the copyright office and register. It costs $35, you can do it online, and if you do it in time it puts you in a better negotiating position. I'm not going to walk through the legal situation here, just do it. Your lawyer will thank you.
2. If you think owning the IP was a provision of the accelerator deal, you could probably brick the deal by writing to the accelerator yourself and pointing out that you own the IP. I wouldn't do that without a lawyer's ok, but I would definitely make a threat as one software engineer to another to the founders that it's within your power to contact the accelerator and see if the cofounders blink.
3. Is the IP being used by them right now? And how is it being used? There are potentially some strategies there but I would need more details. If you don't want to share that information here then lawyer up.
1. Run, don't walk, to the copyright office and register. It costs $35, you can do it online, and if you do it in time it puts you in a better negotiating position. I'm not going to walk through the legal situation here, just do it. Your lawyer will thank you.
2. If you think owning the IP was a provision of the accelerator deal, you could probably brick the deal by writing to the accelerator yourself and pointing out that you own the IP. I wouldn't do that without a lawyer's ok, but I would definitely make a threat as one software engineer to another to the founders that it's within your power to contact the accelerator and see if the cofounders blink.
3. Is the IP being used by them right now? And how is it being used? There are potentially some strategies there but I would need more details. If you don't want to share that information here then lawyer up.
As Toby Keith quoted to me one day: "A word for a third". Copyright is implied at the time of authorship and is legally enforceable regardless of registration. Registering the copyright lays down a legal argument for your ownership, but it doesn't preclude other's ownership of the project. Op said "with a large group, including only one other dev", which means there are potentially others involved as well. I agree with your #1 suggestion and would add the application should include the names of all involved.
Before getting the attorney involved in communicating with the other parties, I'd suggest the Op mention to the other parties his copyright to the code/name/project is implied and he's filed for copyrights on the project for all involved. This gives the other parties something actionable, without getting too aggressive. They may or may not choose to do the right thing at that point.
Before getting the attorney involved in communicating with the other parties, I'd suggest the Op mention to the other parties his copyright to the code/name/project is implied and he's filed for copyrights on the project for all involved. This gives the other parties something actionable, without getting too aggressive. They may or may not choose to do the right thing at that point.
Unless this is a work of content or some kind of content (e.g. a logo design?) is integral to the startup, copyright is not the primarily relevant IP doctrine here.
Wait- how is it not relevant if you wrote the source code?
Apologies for slow reply, had family in town.
IANAL, so disclaiming any sort of legal advice here, but the contributions a founder would make in helping to collaboratively create a new company -- everything from a proprietary idea to business model to naming to market entry strategy to logo to features and functions to contributions to code -- go far beyond copyright. With circumstantial evidence pointing to collaborative creation, and no agreement to the contrary of joint ownership (e.g. a "work for hire" contract) or any agreement specifying specific proportions of ownership, a court would be reasonably likely to rule that OP is a partial owner of the entire company. (Whether it is worth the cost of winning this claim is another matter entirely.)
Whereas copyright is the more limited right to own a specific expression (e.g. writing, images, code syntax) in its exact or near-exact form.
Here is the form of agreement you might sign during the formation process if you decided, after a startup weekend, to jointly form a company:
"Developer hereby assigns to the Company exclusively throughout the world all right, title and interest (whether or not now existing) in (i) the subject matter referred to in Exhibit A (“Technology”), (ii) all precursors, portions and work in progress with respect thereto and all inventions, works of authorship, mask works, technology, information, know-how, materials and tools relating thereto or to the development, production, use, support or maintenance thereof and (iii) all copyrights, patent rights, trade secret rights, trademark rights, mask works rights, sui generis database rights and other intellectual property rights and all business, contract rights and goodwill in, incorporated or embodied in, used to develop or produce or use, or related to any of the foregoing ((i), (ii) and (iii) are collectively “Intellectual Property”)."
As you can see it includes copyright but is a superset.
[edit: formatting]
IANAL, so disclaiming any sort of legal advice here, but the contributions a founder would make in helping to collaboratively create a new company -- everything from a proprietary idea to business model to naming to market entry strategy to logo to features and functions to contributions to code -- go far beyond copyright. With circumstantial evidence pointing to collaborative creation, and no agreement to the contrary of joint ownership (e.g. a "work for hire" contract) or any agreement specifying specific proportions of ownership, a court would be reasonably likely to rule that OP is a partial owner of the entire company. (Whether it is worth the cost of winning this claim is another matter entirely.)
Whereas copyright is the more limited right to own a specific expression (e.g. writing, images, code syntax) in its exact or near-exact form.
Here is the form of agreement you might sign during the formation process if you decided, after a startup weekend, to jointly form a company:
"Developer hereby assigns to the Company exclusively throughout the world all right, title and interest (whether or not now existing) in (i) the subject matter referred to in Exhibit A (“Technology”), (ii) all precursors, portions and work in progress with respect thereto and all inventions, works of authorship, mask works, technology, information, know-how, materials and tools relating thereto or to the development, production, use, support or maintenance thereof and (iii) all copyrights, patent rights, trade secret rights, trademark rights, mask works rights, sui generis database rights and other intellectual property rights and all business, contract rights and goodwill in, incorporated or embodied in, used to develop or produce or use, or related to any of the foregoing ((i), (ii) and (iii) are collectively “Intellectual Property”)."
As you can see it includes copyright but is a superset.
[edit: formatting]
>As you can see it includes copyright but is a superset.
Thanks, I thought you were suggesting copyright wasn't part of this set.
Thanks, I thought you were suggesting copyright wasn't part of this set.
>> not the primarily relevant IP doctrine here
Judging from a quick read of his other comments I'm thinking that he might be saying that there is another aspect of IP law that would cover it. I initially felt the wtf-ness as well. It might be nice for him to elaborate on which would be the relevant doctrine.
I'm surprised by all the people telling you to lawyer up; that's silly. If you want revenge, by all means, get a lawyer, get them kicked out of their accelerator, and make sure the venture goes nowhere. The odds of the venture being successful are so slim – if I were you, I'd sit back, relax, and wait to see if anything comes of it. If by some miracle its successful, you'll have plenty of negotiating leverage to bring them back to the table and find something fair.
There is some merit to this approach: continue to assert your IP ownership, but don't take legal action - just preserve the option to do so, if the venture takes off. However, you'd still want to talk to a lawyer to do this right.
Keep in mind that while shopping for a lawyer, you get essentially 30-60 minutes of free consultation (by phone or in person). So prepare a compact summary of the situation (documents and timeline) and then talk to a lot! (You'd be amazed how different their opinions are, so the sum-of-many is worthwhile.)
Keep in mind that while shopping for a lawyer, you get essentially 30-60 minutes of free consultation (by phone or in person). So prepare a compact summary of the situation (documents and timeline) and then talk to a lot! (You'd be amazed how different their opinions are, so the sum-of-many is worthwhile.)
I really couldn't disagree more.
Consulting a lawyer has nothing to do with revenge. It doesn't even really have anything to do with taking legal action! A consultation is just that: getting advice. A lawyer will answer the exact questions the OP asked of HN -- usually for free -- and with the benefit of knowing what they're talking about. Talking to a lawyer does not necessitate any further legal action. It's about knowing what your options are and what the consequences before you do something. And "sitting back and doing nothing" counts as doing something too, and it may have consequences. Why wouldn't you want to find out for sure?
No offense, but have you ever actually talked to a lawyer about a civil matter? I've personally never had a lawyer pressure me to a file a lawsuit or take any aggressive action -- quite the opposite.
Consulting a lawyer has nothing to do with revenge. It doesn't even really have anything to do with taking legal action! A consultation is just that: getting advice. A lawyer will answer the exact questions the OP asked of HN -- usually for free -- and with the benefit of knowing what they're talking about. Talking to a lawyer does not necessitate any further legal action. It's about knowing what your options are and what the consequences before you do something. And "sitting back and doing nothing" counts as doing something too, and it may have consequences. Why wouldn't you want to find out for sure?
No offense, but have you ever actually talked to a lawyer about a civil matter? I've personally never had a lawyer pressure me to a file a lawsuit or take any aggressive action -- quite the opposite.
Edit: I see one fellow saying to have a lawyer send a C&D or some other sort of nastygram. I agree that's premature, although if he asked a lawyer to do that they'd most likely inform him about other options.
On first read, I think this is very, very bad advice. It depends on what you mean by "lawyering up," but all I see are other commenters telling the OP to talk to a lawyer.
He should 100%, absolutely, without question talk to a lawyer — if for no other reason than to understand his options and their legal consequences.
At an absolute minimum, he should have an attorney read over the invention assignment agreement. Beyond that, he has three choices WRT the agreement: sign it as is, sign a modified version of it, or sign no version of it at all. A lawyer is the only person who can honestly talk to the OP through the legal consequences of each choice.
For example, if he doesn't sign, what rights do the other founders have? What rights could they reasonably claim? Is he liable for anything? If he decides to use some or all of the software or other assets he developed while working on this project with these other people, could they have any kind of claim against him?
This is basic diligence and doesn't mean he needs to be aggressive, sabotage the project, get them kicked out of the accelerator, or anything else.
On first read, I think this is very, very bad advice. It depends on what you mean by "lawyering up," but all I see are other commenters telling the OP to talk to a lawyer.
He should 100%, absolutely, without question talk to a lawyer — if for no other reason than to understand his options and their legal consequences.
At an absolute minimum, he should have an attorney read over the invention assignment agreement. Beyond that, he has three choices WRT the agreement: sign it as is, sign a modified version of it, or sign no version of it at all. A lawyer is the only person who can honestly talk to the OP through the legal consequences of each choice.
For example, if he doesn't sign, what rights do the other founders have? What rights could they reasonably claim? Is he liable for anything? If he decides to use some or all of the software or other assets he developed while working on this project with these other people, could they have any kind of claim against him?
This is basic diligence and doesn't mean he needs to be aggressive, sabotage the project, get them kicked out of the accelerator, or anything else.
+1
The first step is to talk to a lawyer and stop talking about details here. Most likely, it will be resolved through negotiation, especially if a lawsuit may hamper their ability to move forward with the accelerator they applied to. Also, start pulling together all documents/evidence related to the work you've done including emails, powerpoints, records of work done at the hackathon, etc.
Thanks for your reply. I understand lawyers are the last resort, I was hoping for other interim steps before incurring legal fees.
From an outside perspective given what you wrote, it seems like you're already at the last resort. If they were bold enough to lie to an accelerator, they won't likely listen to anything but the threat of a lawsuit at this point. Just my humble opinion anyways.
Lawyers should be your first resort in legal issues like this. No one here, even actual lawyers, can give you the kind of tailored-for-your-exact-circumstances advice that a real-life lawyers can.
I wish this weren't the case, but it is.
In terms of money, most lawyers will at least give you a preliminary meeting for free to hear where you stand, and some will be able to take your work on contingency (I have no idea if that's reasonable in this type of case, though). So at least getting a first impression of your chances shouldn't cost you anything but time.
I wish this weren't the case, but it is.
In terms of money, most lawyers will at least give you a preliminary meeting for free to hear where you stand, and some will be able to take your work on contingency (I have no idea if that's reasonable in this type of case, though). So at least getting a first impression of your chances shouldn't cost you anything but time.
While I totally understand not wanting to incur legal fees, don't think of Lawyers as the last result. Good lawyers make things clear, especially when you're otherwise not super well defined as a business.
Is that to say they're the first go-to? Of course not. But the moment you get the feeling like you're getting bent over a barrel, you get a lawyer. You don't wait, you contact them and at the very least get a clear idea of the direction you should probably move in.
Is that to say they're the first go-to? Of course not. But the moment you get the feeling like you're getting bent over a barrel, you get a lawyer. You don't wait, you contact them and at the very least get a clear idea of the direction you should probably move in.
Lawyers will (in my experience) give you a free consultation to understand your situation and explains some options before there are any fees.
I hadn't considered that - thanks for the advice. I've now requested a consultation.
Do many free initial consultations, with different lawyers! Each will have a different take, adding something to your understanding, unless you happen into the world's best at these issues on your first inquiry. Maybe you'll then rack up fees with one... but maybe instead you'll just know how to protect your rights, if the venture takes off, and then return to that lawyer years later to collect. (No out-of-pocket costs up front.)
Request them from a few attorneys to get a better array of choices. As with anything, attorneys come in a wide variety of abilities and styles.
Recommendations are optimal. Also try to get at least one who is agressive in the mix. If they all corroborate one another, then that in itself is a statement.
The difference in suggested recourse and the outcome itself can be night and day depending on your counsel.
Recommendations are optimal. Also try to get at least one who is agressive in the mix. If they all corroborate one another, then that in itself is a statement.
The difference in suggested recourse and the outcome itself can be night and day depending on your counsel.
If you are really too uncomfortable to meet in person, there are few other interim options and you probably need a lawyer if you want to take this further.
I would suggest that you reconsider meeting in person - this is a good interim step that will help you to understand exactly what the situation is. Of course, it's sensible to insist that any agreement is made in writing.
I would suggest that you reconsider meeting in person - this is a good interim step that will help you to understand exactly what the situation is. Of course, it's sensible to insist that any agreement is made in writing.
Going to court is the last resort. Asking a lawyer for advice on a legal matter is not the last resort.
Thats a really important distinction I hadn't made in my head, thanks for the advice
They're in serious trouble without the IP assignment. If they want the IP, they should pay you for it.
If they go ahead without the IP, and rewrite, then they shouldn't pay you for it.
You've tried to play nice, its lawyer time now. Get the lawyer to post a letter, you can probably pretty quickly agree to a small equity stake, such as 3-5%. That's a small enough amount that they'll just agree to it, a large enough number that it'll pay you off if the company goes somewhere. It seems roughly fair for the amount of work you put in.
If they go ahead without the IP, and rewrite, then they shouldn't pay you for it.
You've tried to play nice, its lawyer time now. Get the lawyer to post a letter, you can probably pretty quickly agree to a small equity stake, such as 3-5%. That's a small enough amount that they'll just agree to it, a large enough number that it'll pay you off if the company goes somewhere. It seems roughly fair for the amount of work you put in.
There's whole host problems that owning shares of a company, with founders that are actively hostile against you.
Defiantly need to make the terms watertight.
Defiantly need to make the terms watertight.
+1 this. The time you're going to spend with a lawyer making sure that they're not screwing you (again) on dilution isn't going to be worth the value of the equity.
At this stage it'd probably be more worthwhile for you to lawyer up and use the IP leverage to get them to pay your consulting rate (itemize your statement for time spent, even if it's an estimate).
A lawyer will probably advise you to send a last invoice and then a week later a C&D. It can be quite persuasive along with letting them know that next steps are alerting their accelerator to the IP that you own, and then the possibility of a lawsuit.
If you have enough documentation and the case looks strong enough a lawyer may even agree to work with you on contingency.
[Technically the accelerator would be well within their rights to sue as well since it's pretty obvious they didn't disclose there was an ongoing IP issue with one of their cofounders.]
At this stage it'd probably be more worthwhile for you to lawyer up and use the IP leverage to get them to pay your consulting rate (itemize your statement for time spent, even if it's an estimate).
A lawyer will probably advise you to send a last invoice and then a week later a C&D. It can be quite persuasive along with letting them know that next steps are alerting their accelerator to the IP that you own, and then the possibility of a lawsuit.
If you have enough documentation and the case looks strong enough a lawyer may even agree to work with you on contingency.
[Technically the accelerator would be well within their rights to sue as well since it's pretty obvious they didn't disclose there was an ongoing IP issue with one of their cofounders.]
Agree that if you're a minority shareholder in a company and have a bad relationship, you can expect to get abused. You need to make sure that the share purchase agreement is sufficiently thorough to foreclose the possibility of disproportionate dilution or other tricks.
Unfortunately, the cost of hiring a lawyer to do this is probably several hundred dollars (at least), which may well not be worth it or feasible for you right now. If they're in an accelerator, they may have the cash to pay you. Sure, you'll kick yourself if they end up billionaires someday, but you can be certain that they'd have found a way to screw you if you'd taken equity instead.
Unfortunately, the cost of hiring a lawyer to do this is probably several hundred dollars (at least), which may well not be worth it or feasible for you right now. If they're in an accelerator, they may have the cash to pay you. Sure, you'll kick yourself if they end up billionaires someday, but you can be certain that they'd have found a way to screw you if you'd taken equity instead.
Agree to 51%, call a shareholder meeting and elect a new board of directors, then have the board fire them all.
Fuck them over by drawing it out in court until the market opportunity dies. While it's going through court, open source it, and make sure every potential investor knows about the court proceedings.
Fuck them over by drawing it out in court until the market opportunity dies. While it's going through court, open source it, and make sure every potential investor knows about the court proceedings.
You appear to be asking a legal question, which means you absolutely 100% need to speak to a lawyer. You must not rely on advice from strangers on the internet. People posting here don't even know what jurisdiction you're in; they can't possibly be providing you with the best legal advice. Most good lawyers will give you a consultation for free. Take them up on it!
Thanks for the advice - another poster suggested this too and I've now requested a consultation.
[deleted]
Don't work with them again. Forget about it. Document it, and if they are successful you can always threaten them. They probably won't be. If its worthwhile and you really want to, you can carry on working on it, though I would be careful, probably start again.
Best option: celebrate finding out that your former partners were going to rip you off before you'd put in two or three more years of work.
Save all correspondence. Wait until they are about to do a billion dollar exit, then get a lawyer and threaten to tank their deal. Settle with them for FU money.
You could just let the idea develop, and if it turns out successful, pull a Winklevoss and reap the benefits without doing any more actual work on the project...
1. Tell them you're going to tell the accelerator about the IP dispute
2. Just tell the accelerator that you believe they're infringing your IP.
3. In future, get some form of paperwork signed early - I've used http://www.seedcamp.com/2011/09/seedhack-founders-collaborat... in the past.
2. Just tell the accelerator that you believe they're infringing your IP.
3. In future, get some form of paperwork signed early - I've used http://www.seedcamp.com/2011/09/seedhack-founders-collaborat... in the past.
Crappy situation.
If you're a developer about to go into business with non-devs, especially young people who haven't started anything before, you need to be aware that the fact that "without you, they have nothing" isn't going to do you any favors. If you don't take a leadership position and continuously maintain that position, they are going to look at you like you work for them. Then get all mad and afraid when you start making demands that you think are personally reasonable to make given your status as the pig and theirs as chickens.
Once that starts happening, you're in for a rough ride. These interpersonal dynamics make startups much harder than you'd think they should be. I don't think that people like Peter Thiel quite appreciate this when they recommend going into business as a good alternative to college. Experience really does count for a lot and if you don't have it, you could easily find yourself in situations like this, where suddenly you have to lawyer up on people you thought were your friends.
If you're a developer about to go into business with non-devs, especially young people who haven't started anything before, you need to be aware that the fact that "without you, they have nothing" isn't going to do you any favors. If you don't take a leadership position and continuously maintain that position, they are going to look at you like you work for them. Then get all mad and afraid when you start making demands that you think are personally reasonable to make given your status as the pig and theirs as chickens.
Once that starts happening, you're in for a rough ride. These interpersonal dynamics make startups much harder than you'd think they should be. I don't think that people like Peter Thiel quite appreciate this when they recommend going into business as a good alternative to college. Experience really does count for a lot and if you don't have it, you could easily find yourself in situations like this, where suddenly you have to lawyer up on people you thought were your friends.
1. Don't get angry, and never do something stupid
2. Send them email clarifying all your rights/claims and list all what they need to do to compensate you (money? ask higher than what you want)
3. if they start negotiating the numbers, start negotiating till you reach a good deal that satisfy you. (negotiate slowly, no equations, and always get advice from friends who have good negotiation skills)
4. if friendly negotiations fail, ask your lawyer to take legal action.
A best practice is to have a lawyer from day one. it's a lot of money but worth it. (always ask your lawyer before saying/doing something. your lawyer's job is to prevent you from doing something stupid).
Also, don't let that stop you from moving forward with your life. you built something once, and you will do better with your next startup.
[Been there, done that]
2. Send them email clarifying all your rights/claims and list all what they need to do to compensate you (money? ask higher than what you want)
3. if they start negotiating the numbers, start negotiating till you reach a good deal that satisfy you. (negotiate slowly, no equations, and always get advice from friends who have good negotiation skills)
4. if friendly negotiations fail, ask your lawyer to take legal action.
A best practice is to have a lawyer from day one. it's a lot of money but worth it. (always ask your lawyer before saying/doing something. your lawyer's job is to prevent you from doing something stupid).
Also, don't let that stop you from moving forward with your life. you built something once, and you will do better with your next startup.
[Been there, done that]
It's not always worth it. You can spend a lot of money on lawyers chasing something that is worth nothing, and end up with nothing but a lawyer's bill.
The legal path is difficult and very subjective. If you used github or some other kind of version control, make sure you keep the repository history intact in its original form.
If there's no money behind this idea, you're probably not going to get paid regardless of whether there was a written agreement in place. This is assuming you did the one base step of forming an LLC or corporation - if not, they can be personally liable for paying you as an employee.
Sorry you got burned, it happens to the best of us. Good luck on your future ventures - the best revenge is to be way more successful than those two.
If there's no money behind this idea, you're probably not going to get paid regardless of whether there was a written agreement in place. This is assuming you did the one base step of forming an LLC or corporation - if not, they can be personally liable for paying you as an employee.
Sorry you got burned, it happens to the best of us. Good luck on your future ventures - the best revenge is to be way more successful than those two.
It looks like you had agreed to an advisor position, so why are you feeling ripped-off now?
It's pretty clear that there is a disagreement about how to run the business, and some of the team members would rather get funding, possibly so they can hire more obedient developers.
Every time I get asked about such a scenario, I ask the same question: who of the team is most likely to take this idea to success without the others? Are you the one who is repraceable? It looks like two founders think so.
At this stage, my strongest recommendation is to leave your ego out of it. Do you believe in the chances of the current team? If so, join them and leverage your IP for the best deal. If not, move on and don't look back.
It's pretty clear that there is a disagreement about how to run the business, and some of the team members would rather get funding, possibly so they can hire more obedient developers.
Every time I get asked about such a scenario, I ask the same question: who of the team is most likely to take this idea to success without the others? Are you the one who is repraceable? It looks like two founders think so.
At this stage, my strongest recommendation is to leave your ego out of it. Do you believe in the chances of the current team? If so, join them and leverage your IP for the best deal. If not, move on and don't look back.
You can spend time and money fighting for this, which may well land you with a small percentage of a company that may or may not go somewhere - and a small percentage that will doubtless be diluted over time - or you can move on with your life and forego that stress and expense.
Only you know how far the project can go with what, to be honest, sounds a fairly chaotic group of people steering it. If you really think it's worth fighting about then go for it, with the awareness that you may expend time, money and emotional effort but still end up with nothing much. Otherwise, move on and make something else, and something better.
Only you know how far the project can go with what, to be honest, sounds a fairly chaotic group of people steering it. If you really think it's worth fighting about then go for it, with the awareness that you may expend time, money and emotional effort but still end up with nothing much. Otherwise, move on and make something else, and something better.
It is possible that your team orally established a partnership (see http://business.ca.gov/StartaBusiness/DefiningaBusiness/Gene... if you're in CA). State law will determine what interest each of the partners has in the event that no written agreement exists that lays this out. You should definitely talk to a friend who is a lawyer, or reach out through LinkedIn to find one you can trust. Good luck, and feel free to find me at gmail if you want to chat further.
> After 7 weeks I've chased them a few times and received a single request to meet in person (I declined as I want written records of all exchanges).
You can do this in person, with video tape and an attorney witnessed it. No?
Write to the accelerator organization and get an attorney to handle this matter.
I might even go as far as revaling their names and make this into a public issue. The more pressure they receive from your side, the more willing they will work with you. But that's dangerous so use that as last resort.
You can do this in person, with video tape and an attorney witnessed it. No?
Write to the accelerator organization and get an attorney to handle this matter.
I might even go as far as revaling their names and make this into a public issue. The more pressure they receive from your side, the more willing they will work with you. But that's dangerous so use that as last resort.
What is your estimate on the value of the startup? If it isn't much, write it off as a learning experience and move on.
The amount you pay a lawyer might be more than the value of your shares in the startup.
If they are dishonest, being a minority shareholder in their startup isn't worth much anyway. There's too many ways for them to cheat/dilute you later.
The amount you pay a lawyer might be more than the value of your shares in the startup.
If they are dishonest, being a minority shareholder in their startup isn't worth much anyway. There's too many ways for them to cheat/dilute you later.
What is your desired outcome?
They probably already read YC so when they read this and see all the potential avenues you have against them they're going to come running with some kind of settlement I'd say.
(Lazy) Devil's advocate:
https://news.ycombinator.com/item?id=7324236
https://news.ycombinator.com/item?id=7324236
start over; build it better than they are.
You will be surprised to know that this is more common than you may think so don't take it personally.
I have been on the giving and receiving ends.
--- GIVING END ---
Armed with research "how to kick out a co-founder" you approach this person and tell them that you are letting them go. The first time I did this, I never gave them notice and blocked access to the work. They never mentioned this to me, and they have never talked to me ever again and have therefore effectively burnt a bridge - it was so bad, I did a presentation at an event once and the guy walked out to "buy his meds".
The second time I've had to do this, I am nicer now and gave this person written notice in advanced as well as an opportunity to draft an agreement as well as an actual discussion of said agreement.
--- RECEIVING END ---
Now, I was on the receiving end although the mental dissonance was not so great as it was a partnership. I knew that it was not going well BUT being on the receiving end is complete rubbish. Even after nearly 3 years, I wouldn't event want to have coffee with these guys.
--- BACK TO YOU ---
You mentioned that you played a central role in the product concept, strategy, legal approach AND coding which means that these two 'non-devs' were not that essential. Which begs me the question as to why you were not the one to kick them out in the first place. The only excuse would be if the original concepts have changed over time it would also require you to change your mind in regards to the development of it. It's like being in a rock and a hard place for the 'non-devs' if they need to get permission or approval from the coders (ie you) regarding the product. It's a power thing. The non-devs don't want permission from you. And you know that you don't have to code their suggestions. You are the product because y'know, you're the dev! Maybe that's another reason why they wanted to kick you out - they simply just don't want you in their group (starting to sound a bit like high school...). I had a discussion with an entrepreneur friend of mine (business guy) and his answer was "the technical guys will always think that they can do it all themselves".
Keeping in mind the unpleasantness of this situation there are some things that you did good. For example, not signing the IP transfer agreement (and keeping it) which indicates that they recognise your IP in the first place. Asking for equity share to be written down. Reacting in a mature way by requesting to be paid for your consultancy fee - although keep me updated if you go through with this. It has happened to another friend of mine - he was with their company for several months, the business guys had senior positions in big companies like BSkyB, used his savings to move to another city. When things didn't turn out, he tried to claim a consultancy fee but was laughed off! I swear anyone who has managed to work within the upper rings of big corporations is a sign of psycopathy!
Now what are your options? Open up a start-up featuring your product. It is still your IP. You may need to get 'non-devs' on board so this time around try to have some sort of written agreement in place. The thing with this current group is that if the non-devs play their cards well, they'll hold up the front well enough to get some investment, and through that be able to purchase coding talent to fill in the gaps. Eventually, down the track, the product that was previously 'yours' will turn into 'theirs'. Welcome to the circle of life!!
You can also nurse yourself with the fact that most start-ups will fail including this one. So if you think that the product is good enough, then yes, go ahead and start-up. Don't focus too much on your new competition and just add this in your things to learn pile.
Another thing to keep in mind is that if you startup with this product it will only provide a bit of extra validation and will probably push the other start-up to do better. So think about doing this in stealth mode and go public when ready. I know because this move has been done ;)
--- GIVING END ---
Armed with research "how to kick out a co-founder" you approach this person and tell them that you are letting them go. The first time I did this, I never gave them notice and blocked access to the work. They never mentioned this to me, and they have never talked to me ever again and have therefore effectively burnt a bridge - it was so bad, I did a presentation at an event once and the guy walked out to "buy his meds".
The second time I've had to do this, I am nicer now and gave this person written notice in advanced as well as an opportunity to draft an agreement as well as an actual discussion of said agreement.
--- RECEIVING END ---
Now, I was on the receiving end although the mental dissonance was not so great as it was a partnership. I knew that it was not going well BUT being on the receiving end is complete rubbish. Even after nearly 3 years, I wouldn't event want to have coffee with these guys.
--- BACK TO YOU ---
You mentioned that you played a central role in the product concept, strategy, legal approach AND coding which means that these two 'non-devs' were not that essential. Which begs me the question as to why you were not the one to kick them out in the first place. The only excuse would be if the original concepts have changed over time it would also require you to change your mind in regards to the development of it. It's like being in a rock and a hard place for the 'non-devs' if they need to get permission or approval from the coders (ie you) regarding the product. It's a power thing. The non-devs don't want permission from you. And you know that you don't have to code their suggestions. You are the product because y'know, you're the dev! Maybe that's another reason why they wanted to kick you out - they simply just don't want you in their group (starting to sound a bit like high school...). I had a discussion with an entrepreneur friend of mine (business guy) and his answer was "the technical guys will always think that they can do it all themselves".
Keeping in mind the unpleasantness of this situation there are some things that you did good. For example, not signing the IP transfer agreement (and keeping it) which indicates that they recognise your IP in the first place. Asking for equity share to be written down. Reacting in a mature way by requesting to be paid for your consultancy fee - although keep me updated if you go through with this. It has happened to another friend of mine - he was with their company for several months, the business guys had senior positions in big companies like BSkyB, used his savings to move to another city. When things didn't turn out, he tried to claim a consultancy fee but was laughed off! I swear anyone who has managed to work within the upper rings of big corporations is a sign of psycopathy!
Now what are your options? Open up a start-up featuring your product. It is still your IP. You may need to get 'non-devs' on board so this time around try to have some sort of written agreement in place. The thing with this current group is that if the non-devs play their cards well, they'll hold up the front well enough to get some investment, and through that be able to purchase coding talent to fill in the gaps. Eventually, down the track, the product that was previously 'yours' will turn into 'theirs'. Welcome to the circle of life!!
You can also nurse yourself with the fact that most start-ups will fail including this one. So if you think that the product is good enough, then yes, go ahead and start-up. Don't focus too much on your new competition and just add this in your things to learn pile.
Another thing to keep in mind is that if you startup with this product it will only provide a bit of extra validation and will probably push the other start-up to do better. So think about doing this in stealth mode and go public when ready. I know because this move has been done ;)
[deleted]
I discovered two of the non-devs had applied to accelerators without asking the team, despite me making it clear that in my opinion we didn't need outside investment. I handed over my work-in-progress and emailed the team saying I was moving to the "advisor tier" which the two had previously described as coming with "a small share of equity", and received positive replies from them. Since then I've been contacted by the other dev for assistance (he'd never heard of node.js - let alone the rest of the tech).
Less than a month later they asked to meet to give me a "token of [their] appreciation". They then ambushed me with an IP transfer agreement and told me that in their opinion I deserved no equity. I didn't sign it.
I contacted them explaining that if they wanted to buy me out, and retrospectively change our relationship, I would expect to be paid for the consultancy I'd provided, and quoted a fair fee. After 7 weeks I've chased them a few times and received a single request to meet in person (I declined as I want written records of all exchanges). The core two and the other dev have since enrolled in an accelerator - and therefore presumably lied about owning the full IP when they gave them equity.
What are my options?