sharesI would like to share a little story with you and would like to hear some opinions with respect to a fair or not fair split.
Back in 2012 I built a piece of web software for a company when I was still a student. They were friends so no contracts, no nothing. In total I spent 1.5 years developing their application (I got like 10k out of it or so). It is still in production but I don’t actively work on it anymore.
Beginning of this year I decided to make a business out of this idea together with a guy I met working at another company. We want to take the general idea, add some needed abstractions and remove some too detailed features.
Now the person for whom I initially built the app demands a share.
And I am asking myself. Why? He sais it is his idea and when we initially worked on that we learned what works and what not. And for this historic things he wants a share.
I on the other hand say: With this logic my former employer needs a share as well because he tought me how to build software.
I offered him pie for the future in combination with consulting which we might need. I offered him free usage of the product in the future if we succeed with it and can make a living out of that. But he insists that only a 10% share upfront is fair. Even though we might be doing something completely different in the end.
I would love to get some input from you guys. :)
Who owns the app?
If you were his employee, then his company clearly owns the app.
If you were not his employee, then you were an independent contractor and it is more complicated to determine ownership. You can read about work for hire to learn more, but, in a nutshell, the app is owned by you unless you signed a document transferring ownership of the code to him (many independent contractors do this).
If you own the app, then you are under no obligation to give him a share. If you don't, then you need to come to an agreement with him. In my view 10% is very reasonable.
Avoiding Risk
From your question, I suspect that there may be some gray area regarding ownership of the app. It is in your best interest to avoid any possible conflict. If your company is very successful, you don't want him to later claim that he owns much more (a la the Winklevoss twins).
This person is a friend, he paid you $10,000 for the work, he is only asking for 10%, and you avoid and future ownership clouds. This sounds like a fair deal that you should take.
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