business-plan, business-model, business-structure, business-proposalI am a software developer with no experience in business, I have recently developed a proof of concept software solutions leveraging plugins and frameworks available on wordpress to provide a solution for a problem the education industry currently has. I have presented this solution to a possible client within that sector who seemed very interested in the solution.
They felt it would defiantly solve a particular issue faced by the sector and at the end of the meeting they discussed they discussed the option of moving forward into a partnership. The idea was that they would use the software in there institutes and then have it as an investment/business opertunity for their institute, one of the comments made by them was referring to on selling and something regarding the Intellectual property (however I wasn’t too sure what this referred too due to my lack of experience).
My initial feeling is that they would give the product validity by backing it and using it themselves and at the same time help drive its potential success, and I would be the one to make and maintain it.
My questions are;
Question 1:
I am leveraging wordpress plugins which I have licenses for then adding additional functionally myself to produce the desired outcome, dose this constitute intellectual property?
Question 2:
How do I proceed to the next step of partnering with them? I have said I would provide them with a proposal document outlining what I have done so far, what needs to be done before the product is ready… however I am not sure this is even the next logical step to take? What is?
Question 3:
What issues should I be aware of before entering into such a partnership?
If you have gotten this far, thank you very much for taking the time to read. Any suggestions previous experiences you have had I would love to hear as this has been a big weight on my mind not knowing the answers or having anyone to talk to.
PROPOSAL
The proposal document sounds very good. Make sure it is a organized and professional as possible, and be careful not to disclose anything proprietary. (i.e. you give them the “high level” explanation, but avoid specific details of how you do it until you have a contract.) Alternately, you can have them sign a non-disclosure if you do need to disclose something proprietary. You can find boiler-plate NDA’s online, but an attorney is always recommended per what are known as “terms of art” and a knowledge of legal precedent in the form of case law.
This will get very complicated if you decide to move forward with partnership, because you’ll have to hammer out the details of ownership and equity. However, if they are worth partnering with, it is worth the trouble.
PARTNERSHIP
Most Important: Transparency
If, when you get to the contract stage, everything is above board and spelled out, and the deal is a win-win for both parties, these are people you want to work with.
If, when you get to the contract stage, things are unclear or shady or it seems like a bad deal for you, do not partner with them as they will most likely rip you off.
Remember, you have the skills and it’s your sweat. That doesn’t mean you’re entitled to the lion’s share, because making a product is very different from selling a product, and the sales/biz dev people make the most money for a reason (not least because we techies don’t want to deal with the stuff the sales/biz dev people deal with, which involves a very particular skill set.) But within that framework, there is still a fair and equitable share for you. Depending on the size of their company, that could range from a fraction of a percent to a nice big chunk.
If they are not offering equity partnership, but a licensing partnership for your code, transparency is still paramount. Who owns the code? What protections do you have? What guarantees? Do you have a way to gauge the revenues to confirm what you should be getting paid?
This is just for starters, and there are definitely people on Startups that have more knowledge and expertise than I. (Hopefully, as this moves along, you can attract an answer from one of them and get even more precise advice.)
INTELLECTUAL PROPERTY PROTECTION
Regarding IP, the cheapest way to initially protect the type of stuff your working on is though provisional patents. You don’t technically need a lawyer for a provisional, but you should do the research to make sure you understand what needs to be in there. There are also “mills” that offer provisional patent filings at a small markups above the filing fees. For a non-provisional patent DO NOT use these mills, as the resulting filing would likely be worthless, but provisional patents have very loose requirements, thus mills can suffice for that.
Copyright may also provide some protection regarding the code, and you should definitely research that more. Copyright protection is automatic, but it can help if you formally file a document with the Copyright office. Copyright is quite affordable. Here is the current fee schedule:
https://www.copyright.gov/docs/fees.html
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