co-founderWe were three guys. Me and a friend had been working (part-time) on a software product for 1.5 years when another guys joined. In a meeting we discussed to split things up evenly. Nothing was put on paper nor even email.
A few months later my friend lost interest in the project. The late joiner, who had spent his spare time working on the project, was disappointed, lost hope, and stopped working.
The late joiner told me that he would be interested again if I found a replacement for my friend. I was outraged because of his lack of willingness to make this thing work. Almost literally the joiners position was: I’ll do 50/50 again if you manage to find a solution.
We’re half a year later now. I’ve worked hard on the product, found another person that is a great replacement for my friend. Because the late joiner still has software he worked on, I had a meeting with him to discuss how we could get hold of that.
In this meeting the joiner was still saying that 1/3 belonged to him because we said this earlier. Even though I spent 5x more time & effort plus thousands in logo design, web-hosting, software outsourcing, that all ideas were coming from my friend & me (not from him), and that he didn’t do a thing for many months; he still thought it was perfectly logical that he was part of this.
Because I don’t want him to keep any share, given his total lack of interest & entrepreneurship (leaving me to fix things on my own), I proposed to pay him in royalties until he’d be paid back very generously. He did not like my proposal of 100k (for his 1.5 months of work), and wanted 10 million. This made clear that I would never want to work with him again.
Current status is that the joiner did not respond to my email asking to give me a test version of the software, for me to estimate the value. That piece of software (worth perhaps 1.5 full-time work month) is his only contribution, which he is now holding back. He has not responded for weeks.
So again it’s gone completely silent. BTW, I had to ping him to start the discussion about getting hold of his work after totally no interest nor contact from him for months. The fact that he’s not willing to relinquish his work is actually frustration progress, because we need to find someone else to get this work done again.
My question/issue: Are there any bears on our future path, when we start making good money? Could he show up with a lawyer and start claiming a share?
Could he show up with a lawyer? It is certainly possible. Will the court award him anything, probably not, but I am not a lawyer, and I don’t have anywhere near all the facts. If he has nothing to prove that he worked for you with the expectation of equity, his case would be really weak. If he can produce emails that discuss something to that effect he might have a case, but he would also want to prove that the code you are using at that point was the code written by him. By withholding the code, he has done you a big favor because now you have documentation that you don’t have the code.
So you get to start over. In this case, that sounds like a good thing. Take this opportunity to put everything in writing. Clearly document who is doing what for how much. Get a lawyer to make sure you are covering everything.
Maybe most important for this project, keep your new code under version control with daily check-ins so you have documentation that the new code is actually new. Use github (private repo), bitbucket, or other third party so they can independently verify your code history.
As for the late joiner, forgive him. It is good for your health. :) Also from his perspective, he put a month into an exciting project and now he is getting cut out of the deal. From his perspective he did all the real work and all you did was talk about stuff and do a little drawing.
As both a programmer and an entrepreneur, I have had people under-value my work from both sides at different times. Sure it only took me an hour, but I spent fifty hours of unpaid research and practice to learn how to do it that fast. It is easy to under-value work you don’t understand. He would probably be fine with 100k if he really understood how hard the business side is and how much work you have put into it.
But, since he is getting emotional, is unwilling to learn about the business side and does not appreciate your contribution, he is going to be stuck with code that he will probably never make any money on. But he probably learned a lot while writing the code so it not a complete loss for him either.
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