Ask HN: Who should own the software copyright in early stage startups?

4 points_rknLA14y ago5 comments

I'm in the process of co-founding a web service startup (my first one) with a non-technical business co-founder and we're in the process of negotiating seed funding.

My family and family friends are encouraging me to attempt to retain copyright of the code that I've written for the company so far, but this seems dubious at best -- I would never invest seed money into a web startup if the code wasn't owned by the startup in which I was investing, but maybe others would?.

I know it's standard practice for employment agreements to have clauses that say the company owns all of the work product and IP, but what about founders?

So, is there a standard practice for this sort of thing?

Opinions are great, but I would really love to hear from people with anecdotal experience.

Thanks!

5 comments

5 comments · 5 top-level

wmf14y ago

A company that doesn't own its own product is basically a bomb waiting to go off. The company should "buy" any work that you did pre-incorporation in exchange for your founding stock.

JamesPeterson14y ago

When Skype was first sold to eBay, eBay did a whoozy and made bad assumptions resulting in them buying Skype without the core IP.

This later cost them a gazillion dollars after a court process, and the whole world realized they needed to watch their backs just that little more.

I'd recommend exchanging pre-existing IP with the company for your founding stock, otherwise nobody will want to go near you.

royrubin0514y ago

Absolutely the company owns the IP. Investors would be concerned if that wasn't the case. Your best case scenario would be for you to license the code from the company, but as an investor I would think twice if the founder(s) presented this as an option.

benologist14y ago

The company should own the IP, you (and your cofounders and investors) own the company.