
Ask HN: I'd appreciate advice on my current work situation - mb_72
I&#x27;m the sole developer for a product that has been selling as a desktop version for a couple of decades, with me &#x27;on board&#x27; for around 15 years. During my time as the helm, I&#x27;ve implemented a number of improvements to the architecture of the software (including a rewrite enabling development of Mac and web versions, based on the original PC-only version).<p>My agreements with my business partner are based on royalties (20% of all sales and renewals). He works in an office and deals with customer support, I work remotely. He covers all business costs. Our agreements included payment for development work, however then I have needed to pay these pay with reductions in royalties -&gt; I was given an interest free loan for my own salary, and eventually he&#x27;s out of pocket nothing for development costs. Total income for our royalties agreements across time equate to 2 x yearly average salaries in my home country, but spread across the last 6 years.<p>Now he&#x27;s discussed selling the business. If sold, I would receive royalties for the balance of our agreement, using the average sales for the last year.I made a mistake in that I agreed to the 20% royalty rate without negotiation initially, I know that much. I have worked many hundreds of hours under these agreements, and he agrees sales have not been as we would like - but of course, with 80% of the income, it&#x27;s still (roughly for him) 3 -&gt; 3.5 an average salary per year.<p>I wish to renegotiate our agreements to include a clause that gives me part of the sale value of the company as a cash payout, the reasoning here being that my work has increased substantially the value of the company. At say a valuation of 20 x the average salary, I was thinking of 10% i.e. two years of an average salary. I feel that my value to the company is larger than what is being recognised currently, given my contributions (i.e. every single line of code in the company&#x27;s products have been written by me).<p>Am I being unreasonable here?
======
matt_morgan
You're not being unreasonable but that's not the issue. The issue is the
leverage you have now. Your value to your partner ends with the sale. You are
valuable to the new owner as the sole person who understands how the product
works. Even if they only want the idea and the customers, recoding it will
cost something and be cheaper/easier/faster with your participation, plus
they'll need someone to support the current product for a while, or they'll
shed those customers.

Convince your partner that the buyers will need you, and will only get you if
you're happy with the terms of the sale. If you can enlist the buyers in this
campaign, so much the better.

~~~
ChuckMcM
100% agree with this, and add the following caveat.

Don't be surprised if your partner "switches gears" and tries to convince
_you_ that you are being unreasonable and selfish and screwing up the possible
deal (or future deal) with these "demands." Sometimes people present as
friends only because it doesn't cost them to do so, but change their
presentation when being asked to reduce the amount of money they may have been
counting on receiving.

Be ready for that to happen and understand that your actions are not "ruining
a friendship" they are merely illuminating that the friendship was an illusion
to begin with.

------
jonahbenton
You can't really get good advice from strangers on the internet, you really
need to talk to a lawyer and dig into the details, and even finding the right
lawyer can be a very hard problem, so try to ask around to other technologists
in your area and see if there are contract lawyers they have been happy to
work with.

(edit: And to be clear, a good lawyer is 10% the written details in the
contract and laws and regs and 90% understanding the relationship dynamics and
your interests, being able to suggest a range of written structures and terms
that capture tradeoffs, and being able to negotiate effectively. Ideally, a
counselor.)

Some meta thoughts-

* there are all kinds of contracts and all kinds of relationships. Reasonable is in the eyes of the beholders, and depends on what they value (the business vs the person, etc). I have heard of much better (for the developer) terms, and much worse, than yours.

* from business perspective, the question ultimately is one of leverage. The question isn't how much you _have_ contributed to the business- if your partner thinks that way then they value the relationship with _you_ over the value to the business, and the terms you work out are dependent on how you value the relationship with them.

* a business is acquired for the _future_ value it will bring to new owners. The question there is how much is your _future_ contributions are worth to the business. If you are not needed or are easily replaceable and the product is turn key, then your value is zero. If your contributions are needed, then your value is very high and you should try to structure the future relationship accordingly.

Again, these are meta-thoughts only, the most important task is to try to find
a good lawyer who is in your area and is familiar with these kinds of
situations. Good luck.

~~~
x0x0
As jonahbenton said, this isn't a matter of value or right/wrong, it's a
matter of leverage. How hard would it be to replace you?

You will probably have a pressure point that you can exploit with respect to
the sale. ie you can refuse to work for potential new owners. Even if you are
pretty replaceable, I think most potential buyers would be scared off by
having to replace the sole software engineer who understands the codebase. eg
the small software business sales I'm aware of typically come with commitments
around the engineering staff. Be aware that doing this may burn your
relationship with the current owner. As in all negotiations, make sure that
you are actually willing to live with any options you bring up. Your rights
here are so fact dependent that you must get legal counsel in your
jurisdiction.

One smart way to approach this negotiation would be to write a contract
agreeing to a minimum work period for the potential new owners; as a cost, you
would need some percent of the sale price. Again, you must get yourself a
local attorney experienced in these types of negotiations.

One point I would bring up though, is that engineers often _wildly_
overestimate how easy it is to turn lines of code into cash. It is quite
possible that the business end of this business holds all the leverage. When
OP says eg he or she has "worked many hundreds of hours", this sounds like low
maintenance software that the business owner can continue to sell for quite a
long while without any ongoing engineering.

~~~
mb_72
> How hard would it be to replace you?

It wouldn't be easy, I don't believe, and I'm generally quite negative about
my own development abilities and values.

One point I couldn't fit into my original post is that I do have what I
believe to be a good relationship with my business partner, but I feel he's
disconnected from what valuable and capable developers make outside of his
business. Also, he may well not be able to sell the business at all, and in
that case he's suggested I could take over as manager (for higher pay),
however I would be living with the potential sale hanging over my head, and
not knowing whether this better-paid role would ever eventuate.

> this sounds like low maintenance software that the business owner can
> continue to sell for quite a long while without any ongoing engineering.

That's probably a fair statement, although there are normally updates we put
out a few times a year due to changing business parameters in our market, and
once every year we do a major release with new features.

~~~
x0x0
Also, serious question -- why don't you offer to buy the owner out?

~~~
mb_72
Simply - I can't afford it! :)

------
ptero
Talking to a lawyer as others advised may be a good idea, but I recommend
talking to the owner first. Once you bring the lawyer in the conversation
becomes a competitive zero sum game and that switch is generally irreversible.

The reason I would explore a friendly conversation first (and on agreement
bring in a lawyer to write this up and sign) is that the amount you want is
pretty small and, as the sole technical expert, you leverage is high. New
owners will likely want to ensure technical support post-sale and you might
have more weight than you think, even to a point of making or breaking the
sale.

Thus the interest of the current owner in keeping you on board may be WAY more
important than whatever paper you signed 15 years ago. If you really are the
only person who knows how the product works under the hood you might get your
10% from the current owner _and_ a retention agreement from the new owner.

Personally, I would probe gently with the current owner before bringing your
own lawyer in. Just my 2c.

~~~
mywittyname
Do you think he should consult with a lawyer before approaching the owner? I
agree with your statement that bringing in a lawyer at this point is going to
sour the entire negotiation. But I also think it might be important for the OP
to understand what his options are before coming to the table.

~~~
bsaul
I've been on the other side : someone trying to renegociate a deal with me
after having had (bad) legal counseling.

It completely changes the tone of the conversation, no matter what. A lawyer
will gives you a list of all the things that could go wrong, and all the bad
behavior your partner could have (because that's what he's used to seeing).
This _will_ have an impact on what you're going to tell the other person, and
could really cripple the quality of the relationship.

I believe talking to a lawyer should be done before signing anything after an
oral agreement was found (just as a precaution), or if no agreement can be
reached.

Note: obviously my advice only applies if you already know the general best
practices of an industry. If you feel like you know absolutely nothing, then
ask people around you that had similar deals, people in the industry, etc, and
_maybe_ a lawyer, if he's really specialized in the IT business.

~~~
ChrisMarshallNY
I completely agree.

Lawyers have a naturally adversarial mindset. It's what they are paid for. The
really good ones don't trust _anyone_ ; including close family.

In my work, I quickly learned to keep lawyers out of the loop until the last
reasonable moment, because they not only injected a lot of cynicism and
negativity into the situation; they often would fire off an email that CC'd a
C-suite person, instructing me to do things the way they said; thus escalating
the thing from the start.

That said, they are absolutely required for these types of things, especially
if there are lawyers on the other side of the table.

~~~
ethbro
I think most people think of lawyers as consigliere. Friends. People who will
give you good advice.

In reality, they're employed by you to _legally protect_ you to the best of
their ability.

This means that (a) they view everything through the lense of "What should we
do now, in order to have the best possible chance in court in a year?" (to the
exclusion of things which might result in not ending up in court) & (b) they
can be ordered to pursue another course of action.

It's your ship, because it's your money. If you take your hand off the wheel,
they're going to do their best given their perspective. But if you resolutely
decide "Damn the torpedos", then they'll do their best with that too (shy of
deciding not to work for you any longer).

------
bkandel
So I agree with all the comments about needing a lawyer as to the specifics of
your situation.

As far as being unreasonable: The sense I get from reading your narrative is
that from your perspective, because you wrote the code for the software, you
are responsible for a large proportion of the total enterprise value. I think
that in general, engineers tend to discount the contributions of the business
side of things. Reading between the lines (and correct me if I'm being
uncharitable here), your partner is responsible for the idea and overall
business strategy, all capital and expenses(!), marketing, branding, sales,
contracting, and customer support. So even though you wrote the code for the
product, there's a very large gap between that and creating a competitive and
profitable product. He probably views you, with some justification, as more
easily replaceable, which is why he perceives you as having less leverage. So
while you should certainly try to get as much as you can out of the situation,
this description of events doesn't strike me as being particularly unfair to
you.

------
xlii
There is already comment about this, yet I'll allow myself to reinforce that:

Do not approach anything without consulting lawyer first.

Even if you see an advice that sound reasonable, don't follow it without
consulting a lawyer. A lot of stuff is dependent on your current position,
location, local laws, implicit and explicit clauses. Only lawyer can help you
figure this stuff out.

The only other advice I can give you, don't settle on one/first lawyer. Find
3, consult with each and only then make decision with whom you want to
proceed. You can use gut feeling at that point. Good luck!

------
paulsutter
Your position is stronger than you think. A buyer will want your cooperation
as a top priority. The owner knows this, or will soon find out. You don’t need
to persuade him so play it cool.

Definitely talk to the owner. Maybe start by asking him, how does he expect
the process to work? Will you be expected to continue working on the product?
(play naive). Then let him talk, see what he’s thinking.

Best to be calm. This is your strong card, but keep it low key. This will
emerge during the sales negotiations. The owner is likely to present you with
a new contract to sign during the sale process, and this will be your moment
to negotiate a fair outcome.

And you definitely want advice from a lawyer, starting now. At a minimum to
review your existing contract.

~~~
flavor8
This is great advice.

> Your position is stronger than you think. A buyer will want your cooperation
> as a top priority.

To emphasize this: as the sole developer, the buyer is going to want to retain
you (at least for 6-12 months, depending on the complexity of the software).
The buyer's tech team is not going to want to reverse engineer software that's
20 years old. The owner of the company knows this if he's talked to any
potential buyers so far (and if he hasn't, will learn it.)

> Best to be calm. This is your strong card, but keep it low key.

The owner may resist your initial ask. If you at any point see red and are
tempted to raise an ultimatum, step away from the send button / tell him that
you'd like to continue the conversation later. The worst thing you can do is
back him into a corner where his ego gets involved. You may well run into
conflict, but better to leave him aware that you disagree until you pick up
the conversation again than to get into a heated dispute (that will
incentivize him to think about a solution in the meantime too).

------
glitchc
How the amounts equate to salaries is completely irrelevant unfortunately.
This is a legal issue, not a moral one. A new product may double the stock
price of the company, but it does not entitle the engineer to a percentage of
that increase, even if that product would not exist without said engineer. As
per the contract, the engineer's labour is being compensated by wages and
benefits. All the fruits of his/her labour are solely owned by the company.
This is at least true in North America.

20% of royalties is not wages, and implies some sort of IP ownership
agreement. Do you have such an agreement in place? Are there any patents with
your name on them? The IP is (very likely) one of the assets of the business
and will be listed on the net worth balance sheet. If you own a portion of the
IP, you are entitled to a portion of the sale value of the company.

If not the IP, then do you own any percentage of the company? You say he's a
business partner, but it sounds like a work for hire arrangement (see first
para). If the company owns all of the IP and your partner owns all of the
company, it's basically his company, and you might be out of luck. You could
still try negotiating a fairer payout, but it would be up to your partner's
largesse. Furthermore, as you probably realize, the new owners are not
obligated to honour a work for hire arrangement.

~~~
trhway
>As per the contract, the engineer's labour is being compensated by wages and
benefits. All the fruits of his/her labour are solely owned by the company.
This is at least true in North America.

[IANAL] Labour - yes. My understanding though is that despite wages, etc. the
copyright/IP belongs to the engineer until there is an assignment agreement in
place - that piece of paper we all sign coming to a new job and every time
again when our patents get filed. If it were in the US and the OP doesn't have
such assignment signed, i'd think the sale of the company without his
cooperation would go nowhere.

~~~
glitchc
In the absence of an explicit contract, the courts will take the typical
approach or what would be reasonably accepted for that industry. Fairness of
compensation also matters. If compensation seems reasonable for a work for
hire, then that standard will be applied. If the payout is fairly consistent
then it could look like a salary. Engineers cannot hold up sales of companies
unless they have an ownership stake. They could dispute IP ownership but even
then the sale would go through usually. If majority of the voting directorship
is in favour of the sale, there’s nothing to stop it.

The engineer could file a lien in that case. Perhaps that might give the buyer
pause, or they could decide its easy enough to fight or pay out and may go
through with it anyways. Liens do not block a sale if the buyer is willing to
assume the risk.

------
zackmorris
Partners that take more than 50% aren't really your partner, they're just
employing/using you. They'll come up with all kinds of wonderful excuses as to
why they shouldn't pay you, like they're the "business" person, they have to
support their spouse but you're just single, it was their idea, etc etc etc.

The best thing you can do is ask for 50%, then when they refuse, get out of
the partnership. It took me a couple of decades to learn this simple truth,
and cost me (I don't even want to think how much) money. I basically worked
for less than $1 per hour for YEARS.

If you take the 10%, then treat it like investment income and don't do any
more work on the product. It's a big world out there, and the opportunity cost
of sticking with it is the income you could be receiving from other projects.

Sorry to be harsh, but this is the #1 thing I wish I would have told myself
when I was young and motivated.

------
zulban
Consult a lawyer. Bring all paperwork and contracts. Not doing so may be the
most expensive mistake of your life.

------
j1elo
I felt like asking this but I'm not sure it merits an Ask HN by itself: _how_
would you (in each of your different countries, contexts, etc) find a lawyer?

Would you directly ask your personal network? Make a public Twitter
announcement asking for recommendations? Just google "good lawyer for tech
stuff"?...

~~~
kube-system
Any time I need a professional with a specific focus, I always ask a
professional I know and trust in the same/similar field for a reference. That
has always worked well for me.

------
snarfy
Of course, get a lawyer. That said,

> I made a mistake in that I agreed to the 20% royalty rate without
> negotiation initially, I know that much

This is the root of the problem. You were always hoping some day this would be
corrected, and now that day is here.

I'd recommend crunching the numbers and back this up with data. There should
be spreadsheets and charts made of sales figures, expenses, salaries, profits,
loses, etc. Prove to your partner that you didn't really get a fair deal as
the deal doesn't consider a sale. You should get more simply due to the change
in risk.

------
ciguy
Everything is negotiable, but based on the info you've given here you don't
have much leverage in any potential negotiation. The only thing you might be
able to use is the fact that the acquiring party will likely want your
cooperation and possibly to keep you on for a while post acquisition.

This is far from completely necessary though so it doesn't give you much. You
are not being unreasonable but don't be surprised if your partner doesn't
respond positively to your attempts at renegotiation.

------
chadcmulligan
Don't know about the unreasonable, I don't think there's any such thing in
business, but do you have an assignment of copyright set up? If not you may
own all the code - depends on your jurisdiction - IANAL.

~~~
mb_72
Thanks. All copyright is clearly assigned to my partner, it's written into our
agreements. I don't have a problem with this at all.

~~~
fizixer
Looks like you do have a problem given that you created this thread in the
first place.

And I have a "suspicion" assigning full copyright to your partner, of the code
you wrote, may have something to do with it.

~~~
mb_72
> And I have a "suspicion" assigning full copyright to your partner, of the
> code you wrote, may have something to do with it.

My problem is with wishing I had more certainty and, yes, compensation,
related to a possible sale of the company. The code is not of use to me
outside of the company itself, and from a developer satisfaction point of view
I've enjoyed crafting and developing it; it's something I'm proud of, but it
doesn't mean I need or want to own it. I think developers need to be good at
'letting go' their children.

------
cambalache
There is fair and there is legal. It seems to me your requests are fair,but
since I dont know anything about your contract or legal environment I agree
that you should consult a lawyer to find out if your requests are legally
enforceable.

------
tonystubblebine
I would encourage changing your mindset here to think about a negotiation in
terms of power rather than reasonableness.

And I don't mean fists or violence type of power. It's much more what power do
your future actions have to impact the sale value of the company? Those are
the things that matter in a negotiation.

When people talk about what's fair or reasonable, as the OP is doing, I think
they get lost in arguments that don't hold any water. "I put in so much work"
is much weaker than "This is how much money you'll make if you change the deal
and how much money you'll lose if you don't change it."

So, looking at it from the perspective of where do you have power, mainly you
have power to keep working up to the sale of the company, to keep working
after the sale of the company, or to leave right now.

Do any of those things change the value of the sale? If so, you have a pretty
clear path to negotiating for a piece of that value.

I've been the business owner giving out a deal like this recently. The deal
was that I'd guarantee a minimum amount of money and split the revenue, but
I'd maintain 100% ownership. I think I was a bit more up front than this owner
about what the implications were.

IMO, even without ownership, it can be a pretty good alternative structure to
a flat contracting rate or salary. For the employee/contractor it gives a lot
of upside, while still giving the owner some leverage to renegotiate down the
road if that upside gets out of control. Given that the future is hard to
predict, this allows for some punting on deal terms. I literally told the
counterparty, "If this really works, yes, you may live with some anxiety that
I will come back and try to squeeze you."

In practice, this deal has made a lot of money for both of us and the
counterparty has been protected by my fear of losing continuity or momentum in
a business that's doing well.

But this also points to these sorts of contracts only being appropriate for
experienced people. If you aren't comfortable that contracts are not permanent
and that they can and will be renegotiated as leverage changes then you
shouldn't be in these types of deals.

~~~
mb_72
Thanks for the detailed and helpful reply, much food for thought!

------
jsherry
I’m shocked at all the suggestions to get a lawyer as step one. Yes you will
need a lawyer at some point to get the terms into writing but what you need is
business advice to prepare you for a convo w your employer.

That sort of advice is hard to provide without thorough context but few things
to think about:

1\. How key are you the sales process? If technical due diligence is a big
part of the sales process then you have leverage. 2\. Are you a key employee
that the acquirer will want to put under contract for a couple years to ensure
continuity? If so, you have leverage. 3\. Do you generally get along w your
employer? If so, you have soft leverage.

As an earlier commenter said, it’s all about leverage, leverage, leverage. No
(or almost no) owner is going to give you a significant portion of his or her
windfall because it’s “the nice thing to do”. This will only get done if you
have leverage and the courage to use it.

P.s. there are all sorts of expensive tax implications here too when it comes
to ownership transfer. Lawyers and accountants will be needed but not until
you’ve neared some agreement in principle.

------
yowlingcat
1\. Get a lawyer. The advice they give you should outstrip anything you read
here.

2\. Prepare to cut your losses in a worst case scenario. The best time to
contractually quantify ownership stake is before you enter into the
engagement. By the end, you have neither contractual support for your expected
ownership stake, nor the leverage to ink it into a legally binding document.

3\. (my $0.02) Practically, the most you may get from this scenario is a very
expensive learning experience. Whether or not you have the grounding to enter
legal proceedings (or threaten that), the payoff compared to the mental and
financial cost of litigating are likely not in your favor.

Sorry this had to happen to you. It happened to me, too. I learned a valuable
lesson when it comes to doing this kind of work -- you need to get an airtight
legally binding document before you start working, or else you'll be
exploited. That your business "partner" never formally entered into a contract
with you likely indicates the latter.

------
dumbfounder
Not sure if you are being reasonable or not, you need to decide that, there
aren't enough details for me to be sure. Can they fire you and still go
through with the sale? Are they a decent, reasonable human being? If they are
a reasonably decent human I would say, hey I put a lot of work into this thing
and I think I deserve a piece of the action from the sale. Then see what they
say and get their point of view. And if they offers you a deal make sure it is
on paper. If they are a terrible human and they can fire you and still go
through with the sale, then without a prior deal you are not getting anymore
money than you previously negotiated. If they are a terrible human being and
they need you for the sale then you negotiate a deal asap with the aid of a
lawyer, or you walk.

~~~
mb_72
Thanks. My partner is one of the most decent, calm and hard-working people
that I know. We have a good relationship, and perhaps I'm over-worrying about
these matters.

------
cwilkes
“ At say a valuation of 20 x the average salary, I was thinking of 10% i.e.
two years of an average salary. ”

If you take that tack you’re going to end up with the short end of the stick.

I realize you’re just asking for info but you should state this more
positively. “My value to this company is $XXX as sales went from $A to $B and
I can continue to grow it”

Just that simple update changes the power dynamic and also puts you in a
better mindset.

Because I can guarantee you’ll crumble in negotiations when the buyer says “20
times a yearly salary! That’s far too high!” And you, as a software dev that
probably undervalues your worth, will likely agree. Now you are on the back
foot trying to justify your 15x, then 10x, then 5x, then some sort of rev
share as they keep on chipping away.

------
gnicholas
Folks are saying "get a lawyer". Note that you should get a lawyer who
practices in the jurisdiction that governs your contract. It sounds like you
might be in different countries, and even if you were just in different states
this would be important.

Also, in addition to your contract, think about any emails or even
conversations that affected your relationship. Most people don't realize that
oral agreements are just as binding as written agreements in nearly all cases
(not for transfers of land, or agreements that, by their terms, must take more
than a year to complete). The difference is that oral agreements are more
likely to be a he-said-she-said, since there is generally no documented proof
of the precise terms.

------
gregshap
This is a negotiation so think about your leverage. Reasoning about fairness
is very little leverage.

Two Questions:

1\. How important are you to the _ongoing_ revenue of the business after it
changes hands?

If you're an ongoing key person, you do have some leverage with the current
owner. You may have even more leverage negotiating a consulting contract with
the buyer. This is a business negotiation and then a lawyer can help you draft
a good agreement.

2\. Do you believe your 20% royalty continues in the event of a sale?

If your 20% royalty is supposed to survive the sale, maybe you should
negotiate a buyout of that royalty. There are lots of factors in valuing this,
but your anchoring point would be 20% of the expected sale price, and its a
financial discussion not a fairness discussion.

------
JamesBarney
> I wish to renegotiate our agreements to include a clause that gives me part
> of the sale value of the company as a cash payout, the reasoning here being
> that my work has increased substantially the value of the company. At say a
> valuation of 20 x the average salary, I was thinking of 10% i.e. two years
> of an average salary. I feel that my value to the company is larger than
> what is being recognised currently, given my contributions (i.e. every
> single line of code in the company's products have been written by me).

One very unfortunate and many times unfair part of negotiations is they are
based on your future work, not your previous work.

Also hundreds of hours of work for 2 years of salary sounds like you are well
compensate already.

------
jaybrendansmith
Your only leverage is a) Your partner's good faith and good relationship as
your employer, and b) Your willingness to leave your situation. Both are worth
something, and leaving will have negative impacts on your employer. These
situations can get ugly, because once you broach the subject, your employer
may not only decline to negotiate, they might start looking to replace you.
Tread carefully. Much is dependent on your hopefully warm relationship and the
business ethic of your boss.

------
matt_s
Like others have said, talk to a lawyer. But first - who owns the source code?
Are there legal protections in your country (assuming not US) like a
copyright? That could be your leverage in a business negotiation if you own
the code.

If your partner doesn't want to entertain renegotiating, then maybe say from
this point forward (since he is aiming to sell the business) that any dev work
needs to paid for separately from the royalties on existing work. Find other
work in the meantime (maybe before this step).

------
mathattack
The key question is what happens to each of you if you don’t come to an
agreement.

If you can get a good job elsewhere or otherwise monetize your time, you are
in a good position. If the company fails without you, you are in a better
position. If he’s able to replace you easily you’re in a weaker position.

Also - if he’s covering expenses and you aren’t, it’s not really an 80/20
split. If costs equal half of sales, then it becomes a 30/20 (60/40) split.

------
fjfaase
It is not clear what kind of relationship you have with your business partner.
It seems you are not a (co-)owner of the company, but does that mean that you
are an employee. If you have the legal status of an employee, I guess you
might not have any right on part of the sale. But maybe you have some right
for a compensation if you become unemployed as a result of the sale.

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cantabridgeman
Well, there is nothing wrong with trying to negotiate. However, if it is true
that you have an agreement, and if it seems your partner has fairly respected
his part of the agreement, I don't think you would have any legal case. As an
owner of the business, he took on all the risk, paid for all the costs. You
agreed to be paid a royalty.

~~~
dgb23
How is that any different, generally speaking? If you agree to be payed a
royalty, you agree to take on risk.

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battery423
Talk to him first.

"hey i thought about our agreement and i'm not that comfortable with it" I
would like to discuss it with you.

~~~
phkahler
Since things are coming to a close I dont think OP has any leverage in the
situation.

~~~
eps
He's got plenty of leverage, assuming that the product is a part of the
company sale pitch, i.e. the company is not being sold just for its customer
list, website rankings or other non-product assets.

Edit - looking through OP's commenting history, it appears they are working on
the real estate market software. In this case it is _very_ likely that the
company is being sold for the list of its customers to a larger competitor, to
allow migrating customers to the competitor's platform. In this case the OP
has little to no re-negotiating power, because the product is not what being
sold here.

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RantyDave
25% or you won't work on it any more. If you won't work on it any more the
sale will _not_ go ahead. Negotiate a better arrangement (for your time) with
the purchaser.

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bartelby
You need a lawyer

~~~
mb_72
Thanks, that does indeed appear to be the consensus here, and it's already on
my action plan of what to do before talking to my partner about things.

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dangus
Nobody here can help, and you shouldn’t trust them even if they happen to say
something helpful on this forum. You need a business/contract lawyer in your
locality.

~~~
sushshshsh
Yes we should never, ever, under any circumstance, ever bother asking
questions on the internet about anything.

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Chris2048
again, get a lawyer.

But out of interest:

* are your "agreements" a legal contract, or verbal? Are you an employee or a contractor?

* what are the terms wrt duration? was it 20% royalties while you continued as a developer, 20% for the lifetime of the product? Do you have any say in e.g. pricing/offers, which would affect sales/sale price, and hence your %

* you say they "included payment for development work" but that "however then I have needed to pay these pay with reductions in royalties" \- if it comes out of your royalties, how does it include payment for dev work? i.e. how does this differ from " _not_ included payment for development work"; Do you mean he gave you an upfront loan to cover living/dev cost, but there is no additional payment for these on top of royalties?

* is your salary 2x avarage salary (in your home), or 2x salary _for that job type or industry_?

