

Ask HN: Formalities that should be discussed when starting on a group project? - gofx

I am about to dedicate a good chunk of my time and money to working on a promising project. The idea was purely of my own invention. I&#x27;ve bounced the idea off a couple people who have reacted very positively and have expressed interest in working with me on it (without me asking explicitly for their involvement).<p>If I decide to pursue the project with others, are there any formalities that should be addressed -- for example, regarding ownership, patenting, etc. What kinds of agreements should be discussed before we begin investing time and money into the project? Does it need to be formally documented in a particular way? Do I need to involve a legal professional? If some issues do not need to be addressed at the very beginning, then when should they be addressed?<p>Are there standard procedures&#x2F;recommendations that should be followed? Where can I get this information?<p>Up till now, I have only had text conversations (I&#x27;ve made sure to keep time-stamped logs of our conversations). We don&#x27;t have anything tangible -- no prototypes or design notes.<p>It would be frustrating to encounter any dilemmas later on that could have been &quot;prevented&quot; by having established some formal agreements. &quot;Cover my ass&quot; might be one way to put it. I&#x27;d like to get these matters out of the way before I put in time and money.<p>Perhaps I am naive but I see real promise in what we are about to work on.
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gus_massa
I don’t know about the details of the paperwork.

But a usual complain is the distribution of the equity. Imagine that three
year later one of the developers-founder will write a post from a throwaway
account saying that he worked for three years and someone offered only a 5%
equity, and he fells scammed. (Probably, in this case a 5% is very low.)

Another point to consider is vesting, because another developer-founder will
quit the second week, and he will share a 20% of the company forever.

Do you want more equity because it’s your idea and you are investing money?
Are you going to code? Are you going to bring clients/users?

Some ideas from Joel Spolsky: “Joel's Totally Fair Method to Divide Up The
Ownership of Any Startup”

[http://www.brightjourney.com/q/forming-new-software-
startup-...](http://www.brightjourney.com/q/forming-new-software-startup-
allocate-ownership-fairly)

Discussions of this article in HN (with some additional ideas, support and
counterpoints):

[https://news.ycombinator.com/item?id=2445447](https://news.ycombinator.com/item?id=2445447)
(436 points, 1158 days ago, 67 comments)

[https://news.ycombinator.com/item?id=3489719](https://news.ycombinator.com/item?id=3489719)
(328 points, 876 days ago, 93 comments)

