equity, intellectual-propertySadly I decided to leave the startup which I were I was taking an active role as “CTO” and “cofounder”. I’ve started 5 months ago and I developed by myself all the backend,frontend and db night and day for the startup which is not incorported yet.
Mainly I left because I was forced, plus they used the excuse of pivoting to vision to make agreed to leave.
Now the question is, what should I do with the code? I’ve never been paid nor I’m holding any equity share. Should I give the code only in exchange of equity? In case they refuse, am I liable of anything (Germany)?
I don’t really like the idea that they used me until they needed and now the are going to reuse my code to do business..
Side note: At the begining of our adventure we agreed on dividing the shares by 3 in equal parts.
If you’ve no agreement in writing and you wrote the code by yourself, you basically own the code.
As much as possible, avoid equity. You want to get out of this without ever needing to worry about whether you’ll soon be on the receiving end of low class shareholder backstabbing. It happens. It already has, in fact: they forced your hand and sidelined you; they’ll do it again. Sell the code to your former cofounders and put this behind you.
Aim for six months worth of salary or whatever you’re comfortable with to compensate you for your time… That’s the five months you spent on it plus good will for working day and night plus the time you’ll spend negotiating with them to reach a deal instead of looking for a job elsewhere.
If they can’t put cash upfront, try to strike some kind of convertible bond-like deal. Give them a time window to compensate you (plus interest) at their initiative. Beyond that point, you should be able to convert what they owe you into a one-third stake in the company. This will make them or their investors prioritize paying you.
Copyrights laws in the UK (which I’m pretty certain are nearly completely inline with all other European countries via EU directives) state the the owner of intellectual property is:
The original creator of the work, or its first owner.
Basically, such is not the case if:
So if you haven’t signed an agreement involving ownership transfer and hasn’t been paid you are 99.999% the owner of the code.
This is just an odd situation. They let you develop on a personal account (shame on them). You get forced out but they did not really have an exit plan. If the other guy explicitly said he is not able to work with you then negotiations are probably strained. They asked for a password rather than a copy of the program. It appears you have physical possession of the IP. And most likely you also have legal ownership - for that you should consult and attorney. They may not value the software at 4-5 months of your time. They would value it at what it would cost to recreate. I would start with I require some compensation for the code and let them put up even a bad number. If they say that number is $0 as you don’t own the code then at least you know where you stand.
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