
Ask HN: We are shutting down our startup, I get our code. What now? - sad_cofounder
I&#x27;m a technical co-founder and invested a lot of time building our website, app, backend and CMS over two years.<p>My co-founder recently decided to shut the company down, focusing on what he&#x2F;she does best rather than being reliant on tech&#x2F;design loops by making our amazing designer create a Shopify site that he&#x2F;she can manage him&#x2F;herself.<p>Without going into details, it is fair but we will need to have serious talk once everything has settled so I can move forward.<p>Anyhow, as my payment for these past years, I get to sell whatever we have created, code wise, and get the dough for it.<p>The problem is that I have no clue how to properly handle a sell like this.<p>There is a bunch of new startups that has recently popped up, doing what we initially did with a caveat; they lack an app for it, currently hustling to make things work. So there might be a pretty good possibility for us to sell it.<p>To give you an idea what we are doing; an React Native app that sell and connect a very specific type of workshops with costumers over custom WebRTC Video chat(fork of React Native-based Jitsi Meet). What I can tell, I haven&#x27;t seen another custom Jitsi-Meet integration yet that gives the ability customize the UI that we have.<p>We use Firebase as our backend and Stripe as our payment integration. Data entry &#x2F; workshop scheduling is managed using a custom built CMS. We have custom emails + in-app notifications work through Firebase Cloud Functions.<p>Should I contact these startups? Anything I should do first, legally wise?<p>I&#x27;m clueless.
======
duelingjello
\- Write, sign and notarize an agreement that the code is either duplicated or
transferred to you.

\- Decide who gets the data: users, you, someone.

\- Sanitize servers and services by trying to overwrite data with junk values
before canceling.

\- Cancel monthly services and free services.

\- If it was good, don't let the team relationship go to waste. Talk with
whoever's left / worked-with previously about doing something else.

\---- Then and only then ----

\- Do "consultingish" work or solve a problem you have to find a problem worth
solving.

\- Sell something good people want before you invest too much
time/money/mental health building something too much.

\- Keep it real: building "your amazing idea" without a feedback loop
gathering critical data from paying/potential customers is #fail.

\- Someone though will have to step-up to be the sales/buzz builder or one
will need to be found (hopefully, someone you've known for some time or a
friend-of-a-friend). No useless "idea guys" allowed.

\- Sales/buzz person or someone will need to be the captain of the ship
ultimately in-charge of everything.

\- Iterate fast, executing based on feedback and sales numbers. Prefer the
best one you can get into if you can. (YC, hihi.;)

\- Everyone at the beginning gets equal equity vested over 3-5 years. First
employees should get ~1% equity, more if it's an employee-owned co-op.

\- Don't pray for funding, sales/profit cures all.

\- Raise funding only if you could definitely grow faster with more money.

\- Skip accelerators unless you need a network and/or are relatively
inexperienced.

\- When you get big enough, incorporate (California or Delaware C-corp). If
it's s consultancy, LLP or LLC. [https://clerky.com](https://clerky.com)

~~~
kelnos
I'm a little confused because this doesn't seem to answer the question OP is
asking: how to sell the code he's been left with as a part of the wind-down.

~~~
conjectures
Sad to say it, but a bunch of code from a failed startup is probably nearly
valueless without context. I think that motivates an answer based on
extracting value from it combined with the context on it that a founder has.

~~~
kelnos
Oh, agreed, but it would have been nice if the top-rated comment in the thread
actually explicitly said that ;)

------
davismwfl
My own experience with these types of things is that the software is not worth
much at best and most likely worthless overall.

Software without a market and customers already using it is basically
worthless. If you were in a hot market and had clients a competitive startup
might offer some decent money but it’d be mostly for the customer list.

One time that software can hold value is when you have a unique patent or have
invented something that is truly new and revolutionary. Think scientific
software algorithms or long standing problems where your code can be
integrated quickly and solve a problem that isn’t something people can easily
replicate with just some time.

For the most part the sounds of your code is that other people could replicate
it fairly readily with just some time. I am not criticizing anything, just
saying it doesn’t sound like you invented anything truly new. More like you
guys put things together in a way to solve a problem which likely had value to
people but not enough for the software to hold substantial value without a
market and user base.

You can of course try and maybe you’ll get lucky. But I’d likely say you’d
have better luck carving out a library or a complete product and open source
it. Then sell consulting services around it and maybe host it etc.

The costs are sunk, your best bet is trying to use the software as leverage,
not trying to sell it outright. At least that’s been my experience when I had
companies fail before we had real traction. I did have one offer for like $5k
on software we spent ~600k developing. I held the code and integrated parts
into other projects that went on to make me money.

Good luck, and maybe you can prove my experience isn’t true today.

~~~
streetcat1
The problem is that you cannot get customers without software.

So every software STARTS as software without customers.

I assume that the market exists since this should be the reason for the
project.

No code can be replicated easily. This is a myth spread by non programmers.

Software patents are useless since the Alice case. I.e. you cannot really
patent software anymore.

Since I am not sure about the current state of the project I cannot give
advice, but I would try and start the business actions asap. I.e. just
continue with the original plan.

~~~
swsieber
Well, that's not strictly true. Doing things that don't scale (a prime target
for startups) tends to include things you are just pretending is software, but
you actually do by hand.

It's entirely possible to have customers before implementing the software.

~~~
streetcat1
It might be possible to verify the market, but even then you will not get real
feedback unless people actually pay.

I.e. the myth of a landing page as MVP is just that.

~~~
swsieber
I'm not talking about a landing page. I'm talking abouy something that looks
automated but is really powered by people on the backend and would never scale
without actual software powering the product.

It's pretty rare, but it is a thing.

Take for example TillerHQ (never used an, but it seems like a genius product).
You could MVP it as a form the collects bank login info and then has a person
manually copy the bank statements into a spreadsheet for the customer. Highly
dicey due to privacy concerns, but it illustrates my point perfectly.

------
primitivesuave
I was a technical cofounder who built a company on Firebase+Stripe like you
did. When we were acquired it was for the loyal customer base we built in a
niche space, and the relationships we had painstakingly built over several
years. The CEO of the acquiring company gave us valuable insight that the
value of the code we built was not even a minor factor in the acquisition
price/decision. Our first project at the new company was to migrate our
customer data and backend to their infrastructure on AWS. Unless you have
built something proprietary that solves a technical challenge in a meaningful
customer-facing way, which seems unlikely based on your description, I would
suggest moving on. Best of luck to you on future endeavors!

~~~
Accujack
I had the same thought. OP talks about authored code, but then lists all the
pieces that are glued together into a solution.

That takes some customization, but he's not talking about a software product,
he's talking about what amounts to a professional services integration of
several existing products. Consulting gigs like that can make you money for
your time, but the end result is too specific to the situation with too few
lines of original code to have much/any value.

If OP hasn't been paid for his work and it's being suggested this software is
his pay, then I'm going to agree with other posters and say his co-founder is
just dumping him and walking away with anything worthwhile, including the
percentage of the corporation OP had which might be worth $$$$ or $0 in the
future depending and leaving him with worthless code... and if there's a no-
compete written into the sunset agreement for him, he probably can't even use
the code, sell it, or consult with it.

------
aazaa
> My co-founder recently decided to shut the company down, focusing on what
> he/she does best rather than being reliant on tech/design loops by making
> our amazing designer create a Shopify site that he/she can manage
> him/herself.

It sounds like your co-founder is trying to fire you and leave you with the
code, which is not needed because it can be done with Shopify now.

> Should I contact these startups? Anything I should do first, legally wise?

Don't sign anything regarding the breakup of your company. Consider your
founding documents very carefully. What do you own according to these
documents?

The breakup of a company is a negotiation. Maybe not a very pleasant one, but
potentially every bit as important as the founding negotiation.

You will probably want to run your question by a lawyer.

~~~
C1sc0cat
mmm shopify will be interesting to see how that turns out for the other
founder

~~~
koheripbal
Care to expand?

~~~
C1sc0cat
Its not great out of the box - rather a WIX type of solution in my opinion.

A non technical person dumping there technical people and going it alone is as
they say "a brave choice"

Does rather depend how dependant on organic they are.

------
gkoberger
Hey! First off, I'm really sorry... no matter how cordially things end, it's
always hard to see something you cared about and worked for come to an end.

As far as your options, I agree with everyone here who says you likely won't
have much luck selling the code. People rarely buy code; they buy customers or
revenue. It doesn't seem like you have either, and I don't have much to add
there.

BUT! You do actually have something you can sell... your experience. Your last
two years weren't a waste. We've hired founders at my company before, and
they're great... they have an amazing mindset, are great at making things
happen, and tend to be ambitious. These two years of experience are going to
make you very valuable to someone. Like you said, there's a bunch of companies
out there doing something similar. They don't need your code, but they'd love
your experience. You've spent years understanding the space, thinking about
the market, and getting a first-hand technical understanding.

I'd think of it that way... this is an amazing resume for you. You'll be able
to turn this into money, just not the way you're currently thinking!

Good luck :)

------
sixtypoundhound
I'm sorry. NO. Just No.

Speaking as someone who not only invests in websites but authored some early
studies on the fair value of micro-sites (back in 2012) that deal is utterly
bogus.

The value of the business is in the traffic and audience, not the code. To be
honest, getting rid of the legacy code and moving the site onto my standard
platform is a major goal of the early integration process. I do not pay for
code (sorry).

What you have been handed is the back-end of a potential product, the market
value of which is unproven (since you haven't been given the customers). While
I'm sure the technical quality of the work is excellent, there are multiple
strikes against it from a business valuation perspective. Fight for your share
of the store profits.

~~~
gkoberger
It doesn't seem like there are any customers? And it definitely doesn't seem
like their cofounder "gets" the customers... if the site is being shut down
and the code is being given away, then there aren't really customers anymore.
And nothing said above makes me think there are any customers or revenue
currently.

~~~
sixtypoundhound
Indeed. From what I can tell, it sounds like an e-commerce company is
bifurcating into:

\- A B2C Shopify store, with the former traffic / audience

\- Some kind of e-commerce platform (not yet a business)

To your point, if they were not already actively trying to market the code as
a platform, this is an EXTREMELY hard reset for the second project and your
best hope (if you're going to continue this path) is negotiate an acqui-hire.

Speaking as an investor again, the commercial side of the second project
sounds like a potential goat rodeo. You're basically dealing with the sales
cycle for selling a B2B infrastructure product (specialty e-commerce backbone)
to small companies...

Guessing at the market size, you would need an average installed price north
of $5 K to make a business viable which means you need a B2B outside sales
team. Given that you're selling to startups, suspect getting above $100 K
ticket price is a challenge. Strong likelihood of issues with customer
acquisition costs > contribution margin.

Again... hand waving BS about the business I haven't seen, but much caution
would be advised. The other guy definitely grabbed the crown jewels of the
remaining business.

------
sad_cofounder
Sad Co-founder here, first, thanks so much for all the (still incoming)
answers. This is invaluable for me to be able to fully learn and move forward
from this experience. To answer some the overall questions I've seen;

* The company will be completely shut down, no more b-corp.

* I own < 50% of the company

* My co-founder will continue based on our last pivot minus my technical knowledge.

* I would love to be able to chill on this for a while, but my co-founder want to move forward and close our old business down by the end of this year so that he/she can close all tax/business stuff.

* My co-founder invested money to pay our designer / product owner, I invested my time.

* We had no real customer traction due to our (now in retrospect, bad) decision to pivot away from the app we worked hard to release, not maintaining it and work on v2 of it instead. It sucks because through my co-founder, we had serious reach through social platforms such as Instagram, but we also knew the initial business model couldn't scale so we had to pivot.

* Deep inside I knew our code would be a hard sell and I see the bigger picture now. Thank you all for zapping me out of it. I do think that cross-platform WebRTC integration has some value, but as some of you point out, my knowledge is probably more valuable than the code it self. I will reach out to all of you who have pinged me. I might be up to join as a contractor for some time, to help out with knowledge transfer / maintain the code.

* Since my co-founder will still work within the same market, I can't open-source the code without causing friction I'd say. So might not do that.

* I consider my co-founder a really close friend so it is of high importance for me to keep our friendship intact. For us to be able to do that, I need to figure out what is fair so all of your comments really helps!

I'll keep on answering questions as they come. Again, thank you all for your
answers.

~~~
xwdv
> * Since my co-founder will still work within the same market, I can't open-
> source the code without causing friction I'd say. So might not do that.

You were not paid to keep this code under wraps. You don’t owe anybody any
favors. If they didn’t want you open sourcing it, they should have valued the
code and bought it off of you.

Teach them a lesson. Release the code. Otherwise people will just walk all
over you all your life.

~~~
bartread
> Teach them a lesson. Release the code. Otherwise people will just walk all
> over you all your life.

That's a very simplistic heuristic for living. Let me ask this: to what end?

In all likelihood, maintaining a good relationship is of greater value than
"teaching them a lesson". Most times the only person you can meaningfully
teach is yourself.

~~~
xwdv
It goes both ways. The other founder dropped him and left him with nothing but
a useless codebase, he can’t even get any kind of recognition because he’s
expected to not release the code he wrote. He’s been fucked.

------
cjensen
A lot of people are saying code is not an asset, so story time:

In Ancient Days, Ampex was the king of video tape recording and magnetic
storage. They created a system for recording documents onto video tape, and
then later a system for recording documents into mass storage. The software
engineers on this project created a database system to manage the storage.
When the project was inevitably cancelled, they allowed the software engineer
to keep the code from project Oracle.

Of course the value depends on the what the code accomplishes, and what new
ideas you can leverage it into.

[1] [https://www.cia.gov/library/readingroom/docs/CIA-
RDP80-01794...](https://www.cia.gov/library/readingroom/docs/CIA-
RDP80-01794R000100230024-0.pdf)

~~~
nathan_f77
Are you hinting that Oracle Corporation came out of some database code that
was developed at Ampex? I couldn't find anything about Ampex or the CIA on
Oracle's Wikipedia page [1].

EDIT: The Wikipedia page needs to be updated! [2]

[1]
[https://en.wikipedia.org/wiki/Oracle_Corporation#History](https://en.wikipedia.org/wiki/Oracle_Corporation#History)

[2] [https://ce399fascism.wordpress.com/2010/08/02/oracle-corp-
na...](https://ce399fascism.wordpress.com/2010/08/02/oracle-corp-named-after-
cia-database/)

------
james1071
Of course you are clueless. Only a complete idiot would accept code, of no
obvious value, that he had himself written as payment for two years of work.
Not only that, but you are now going to waste further time and, possibly
money, while your co-founder recruits another idiot to work for free. No,
doubt, you will reject this interpretation of events, but that is what has
happened. You might get a job (hopefully paid) where you use your skills, but
selling your code for money does not seem very likely. Perhaps I have got this
wrong, but that is how this situation appears to me.

~~~
sad_cofounder
Thanks for being blunt, sometimes you need to hear it like it is.

As you say, I will reject this interpretation a tad, but that is because I
have knowledge I cannot share here. But some kind of idiot, that I have been.
Just need to analyze it pinpoint what kind.

Also, would you mind to share a story when you have been a clueless complete
idiot and what you learnt from it? I think that would counter the tone of your
comment and help others that being blunt can be helpful.

~~~
james1071
That's not much of a rejection, why not reject it more than a tad?

Instead you have accepted that you were some kind of idiot and are inviting me
to demonstrate my own superior levels of idiocy, which is completely idiotic,
isn't it?

What kind of person does that - seeking out complete idiots online?

~~~
Accujack
Welcome to the internet, sir!

More seriously... I see what you did here, and I applaud his polite response.

Discuss.

------
mooted1
+1 that the code is, unfortunately, most likely worthless.

My company has one chief competitor.

If that competitor went out of business and offered me their source code, I'm
unlikely to pay for it. Code tends to be highly coupled to the specific
assumptions, structures, workflows, architecture, and environment it was
designed for, unless the team has gone out of their way to make it reusable.
Most often, it would be easier to rebuild the same functionality from scratch
than integrate someone else's code into your product.

What _is_ valuable are the more generalizable and often intangible assets my
competitor has accrued:

1\. Its relationships with potential clients. 2\. The lessons they've learned
in building the business so we might avoid them. 3\. Their employees.

Do you have any of the above to offer to companies tackling similar problems?

That said, isolated parts of a codebase can be useful, if it's easy to reuse
and solves an extremely challenging problem and has required a large amount of
investment to develop and mature. If such a part of your codebase exists, you
could try finding a buyer for that.

------
modeless
Code is not an asset. Code is a liability. Nobody wants to purchase a
liability.

Code is inflexible. Code has bugs and vulnerabilities and patent infringements
and licensing issues. Code needs lots of maintenance.

The value is in the people who know the code. That's you. If you sell the
code, you have to go along with it.

~~~
streetcat1
Right. But you need the code to be in business. Anything a business operates
to make a profit is a liability.

What existing code gives you is time and risk reductions.

~~~
solidasparagus
Maybe, maybe not. A codebase that hasn't been integrated into your development
process and is completely unknown to the development team is as likely to slow
down your company as speed it up. At least if you write it from scratch you
learn a lot while writing it, you have deep knowledge of how it works, and
your team isn't pissed off that they need to suffer through someone else's
legacy software.

I've seen plenty of ground up rewrites work, but I have almost never seen
legacy software moved to a completely new team successfully.

------
madiathomas
> making our amazing designer create a Shopify site that he/she can manage
> him/herself

This statement sounds like your co-founder is just getting rid of you because
he realised a designer can do better than you and won't need shares of the
company. You validated the market for him and he doesn't need you. This is the
reason I always tell idea guys to pay me or go and learn programming
themselves and implement their ideas.

------
maxdo
Every developer has a folder of projects that ended up nowhere. This will be a
big folder. That’s it. You lost your time... Expecting you can squeeze
something out of failed project will just increase this time. Don’t burn your
emotions.

------
jb12
I know this isn't what you are looking for but...

Is the stripe integration in react-native? If so, I think it would be great to
open source it and publish to npm. There really isn't a good react native
stripe library out there, the only one I have dealt with is tipsi-stripe[1]
which is poorly documented, poorly maintained and inflexible.

If you _really_ don't want to open source it, I'd love to chat about buying it
off you.

[1] [https://github.com/tipsi/tipsi-stripe](https://github.com/tipsi/tipsi-
stripe)

~~~
servercobra
Agreed on this, on both points, actually. Releasing it open source could be
great marketing for your startup, or selling/licensing it could work out
great.

------
sheeshkebab
My guess is that the code/app will not be as valuable as you hope (unless
there are existing customers that you get to inherit with this transition).

Take a loss on this startup and move forward to something new.

------
fxtentacle
Since the overall tone here is so negative, I would like to point out that a)
you can sell source code and b) some people do work on their amazing hobby
projects without outside feedback and it still works out OK and c) helping
people with their coding can be very rewarding personally

But where people here are correct is that in most cases, source code by itself
will fetch a lower price than the customer contacts, email marketing lists,
pre-qualified leads, ad designs, etc.

That said, we did sell source code at a good price a few times, but that only
worked because:

1\. The company buying it had overpromised to their customers and were
contractually bound to deliver, so purchasing my whacky half-finished source
code was cheaper for them than paying the penalty for not delivering on time.
As part of the deal, we were also hired for a month to integrate their CI into
the app and ship it. After they dodged legal responsibility this way, I
believe they never used the source code again, but instead hired a team to
rewrite everything from scratch. So they paid us purely for the time savings.

2\. The software being sold had been featured on national TV together with a
major Hollywood movie studio praising it. This started out as helping people
for free and then we built without any feedback what we thought the market
needed. But it was a ridiculously unbelievable stroke of lucky events that led
to us sending a feature-limited version to studios and them using it and
promoting it among themselves.

3\. The source code being sold was rumored to contain an algorithm doing
content-based image retrieval (think Google Images search) more efficiently
than the largest publicly available search engines.

4\. The source code was sold at a big loss. It would have cost 5x the price to
hire a team to build it again.

It doesn't sound like you're famous yet or like you invented the next big
algorithm, and you probably don't want to get paid scraps either, so your best
bet if you insist on monetizing the source code would be to find the one
medium to large company that urgently needs this video chat to work or else
they face horrible consequences. Only then will you get a good price.

------
dyeje
Seems like you should just reach out to the startups and see if there is
interest. If there are multiple interested, try selling it as a white label
service. Otherwise sell it outright with a multi-month contract to help with
the integration.

If there's no interest though, then any upfront work you do now will be wasted
effort.

------
jacobsenscott
Put it up on github has your portfolio. Link to it from your linked in
profile. Enjoy a job with steady pay, benefits, paid vacation, and no stress.

------
paxy
In terms of acquisition value, the codebase ranks dead last behind talent,
product, engaged users, company brand, patents and just about everything else.
Even very successful products are almost always rewritten when acquired by a
larger company.

Depending on what your co-founder is walking away with, you may want to
negotiate a better exit. If there is nothing else, then more than the code
work on selling yourself to an interested company.

------
nla
You need an assignment of IP for the code. Otherwise the copyright and thus,
ownership stays with the company or whomever wrote the actual code.

------
darkerside
Think about it this way. The person who knows the most about your code and
application, is most qualified to sell it, and has the best relationships with
the best fit potential customers, thinks it is worthless and wants to go in
another direction.

Code is cheap. Your legacy from this startup will be experience, not code.
Move on and start fresh.

~~~
Aperocky
+1, code is cheap, the ability to write code is expensive.

------
andrewstuart
Code is worth nothing.

Dump it and start something new.

It's a sunk cost.

I've got vast amounts of code from previous projects. All worthless.

------
fallous
I'd suggest contacting accelerators and other early-stage startup fund
aggregators to see if any of their companies have a need, either to replace a
prototype/PoC level product or are engaged in a pivot that would be sped up by
acquiring your software.

------
ngngngng
Depends who you know.

A bunch of Reddit employees broke off years ago and started a company called
Imzy, the CEO decided to shut it down and took ownership of the source code,
which he then sold to someone (I want to say techcrunch) for precisely 1
million dollars.

~~~
susijdjdjxa
I read that Imzy raised $11M, so selling the IP for $1M when they shut down
seems necessary to recover money for the investors. Honestly it surprises me
they could even get that much for a failed company’s code base. Unless you are
saying the CEO personally got that cash? That sounds more noteworthy.

~~~
ngngngng
Yes the second thing. The CEO personally took that cash.

Source: I worked with one of the cofounders of Imzy and he spilled all the
tea, that's the best I got though.

~~~
susijdjdjxa
It sounds like the investors screwed up by giving away their claim on that IP.

------
Nayif
Is it a two-sided marketplace? I am currently building one. If you're willing
to adjust it to meet our requirements, let's talk!

------
Scarbutt
The code without the team is not interesting to any potential buyers, unless
it's a work of art that any team can pick up quickly, are you included in the
package? (you weren't clear about this and changes everything.).

------
XCSme
To everyone saying that code is a liability and not an asset, and that it's
worthless, how do you explain that there are online marketplaces making
millions by selling "code" online, such as ThemeForest, CodeCanyon, Unity
Asset Store, etc.

I guess it is harder to make a platform and just sell it exclusively to a
client than making a platform and offering it as a product for many other
developers. In this case though, he might just be able to sell a few hundred
copies of his code for like $100, which is not a lot of money, asuming the
platform is fully functional.

------
reilly3000
There are lots of people saying the code is probably useless and I’m among
them, but you’re far from it. That is a difficult, modern stack that lots of
people would need help implementing. You’re clearly quite skilled, and the
consulting and labor markets would reward you handsomely. Use it as a sales
tool to get a healthy stream of base income. There is always another startup
if a job isn’t for you. Your location is increasingly irrelevant. Hopefully
you can apply those valuable skills to a problem you enjoy solving.

~~~
reilly3000
I’ll add that cross-platform webRTC integration may be a strong thing to open
with; it sounds unique and of value to those who would know it’s even
possible.

------
kops
I don't feel qualified enough to advise. But here is what I did after folding
my startup

1\. I used it as a very expensive resume. Costs me a few hundred dollars in
running costs on AWS but pays back regularly by helping me win new consulting
clients.

2\. Mine was a travel startup so had few reusable modules e.g. booking engines
for various GDSs (Sabre, Travelport and even Expedia's API). I manage to sell
these with little modifications to a few companies that were building things
from scratch. After initial sale and a minimal support period, further support
was charged at consulting rates.

3\. Initially I thought that I would be able to sell the whole development
stack specially the user management, email verification, security, PCI
compliance payment solution stack etc. But never found any takers for that
part of the code. Don't really know why.

4\. I initially folded my startup because of lack of experience in sales and
marketing. But I am plugging those holes in my competence and I might
resurrect this startup in a couple of years from now. I am glad that I never
gave up my rights to any part of the code or technology.

Not sure if any of above is relevant to your particular case except #1 which
could be useful if you decide to do consulting/freelancing in future.

Edit: formatting / typo

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mharroun
I would argue !@#$ that. You are a co-founder and as such are entitled to a %
of the entire business. This includes code, property, contacts, clients, and
any IP.

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kelnos
I suspect that selling the code to another company, even a small one without
too much established tech, will be pretty difficult. If you were able to find
someone to buy it, at the very least I expect they'd want you to work with/for
them for a while to help with integration, handoff, and support. So you'd have
to be ok with that. But it certainly doesn't hurt to try to shop it around.

I'd definitely suggest that you chat with a lawyer first so you can be sure
that you're protecting yourself properly, both from your old co-founder, and
from any people you might show the code to.

Are you required to sell the code as a part of your separation from the
company? If not, you might consider starting your own company around it, if
you still believe in the product.

Ultimately, I don't think you're getting a great deal here. If you don't have
a prior agreement that gives you anything more liquid, you might be out of
luck (since your co-founder is winding down the company, you soon won't even
have an entity to file a complaint against), but "code in lieu of cash" isn't
a great payout.

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taude
Gut feelings: 1) software isn't likely worth anything 2) use the experience as
a resume builder 3) I'm surprised by so many people thinking this isn't a
common exit at dissolving the company.

That said, maybe worth contacting these other startups. I double they'd pay
for the existing source code to just launch. But, it might make you a good
hire you for them.

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xwdv
I hope you’ve already come to terms that you will probably see no return on
the time you invested in the past two years, and that you are not simply still
in the denial phase trying to squeeze something out of your efforts.

If you sell your code, the most it would probably fetch is somewhere in the
low three digits, and it would probably be snapped up by someone who doesn’t
care about the business they just want to have a beefy open source project as
part of their resume or portfolio (which is basically the smart way to get
open source credibility without toiling for years to no end, think about it,
300 bucks buys two years of open source experience).

If I were you, I’d beat them to the punch and open source your project and
move on with your life, let others maintain it and maybe make it into
something great.

~~~
briandilley
unfortunately - this is probably correct. don't fall victim to the sunk cost
fallacy, as this is the most expensive way (time) to do so.

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martin-adams
If you can't find a way to a) sell the software and b) don't have the passion
to use it alone, here's something you could consider.

Pull the code apart and find the interesting ways you've built it, then create
training videos on how you did it and sell it as a course.

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dangerface
> My co-founder recently decided to shut the company down, focusing on ~SIC~
> create a Shopify site that he/she can manage him/herself.

What value does your software provide over Shopify? Whatever the answer is,
thats is how much your software is worth. Your partner has decided that the
value add of the software isn't enough to justify the cost of you, sorry.

It sounds like it's a simple CRUD app that can be mostly replaced by shoppify
focus on what sets it apart, who would want that feature and what value they
would assign to that feature.

You could try whitelabeling the product and sell it as a platform and try to
compete directly with shoppify, but it seems like the business people just
don't see the value in your software.

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blacksoil
I think you should definitely reach out to those startups to see if they'd be
interested to buy it. Maybe you could package it more as a software
consultancy service where you'd customize the code to fit their needs. Since
lots of startups already been using software house to bootstrap, I don't see
why they wouldn't be interested in your code.

Having said that, I don't think this would be easy feat though, especially
considering you've spent 2 years building it, the price might not be something
affordable for early-stage startups.

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saghul
> To give you an idea what we are doing; an React Native app that sell and
> connect a very specific type of workshops with costumers over custom WebRTC
> Video chat(fork of React Native-based Jitsi Meet). What I can tell, I
> haven't seen another custom Jitsi-Meet integration yet that gives the
> ability customize the UI that we have.

I'm sorry I cannot give you advice for your future endeavors, but if your code
ends up shelved, please consider sharing your Jitsi Meet customizations with
us (I'm one of the Jitsi core devs) so we can improve the SDK.

Best of luck!

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jdmg94
Unfortunately, the only payout you will get from this situation is experience,
you were sold vaporware, it might have been an interesting project for you,
but for your cofounder his idea could fit into a shopify store.

> There is a bunch of new startups that has recently popped up, doing what we
> initially did with a caveat.

this is also a huge red flag, if there are many companies already investing in
doing the same, why would they take your codebase? best case scenario would be
to get a job on the same space now that you have: experience.

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4ME
I just can't believe I can't believe this I just signed up or because I loved
it too much that's just our luck! if I had a lot of money I would invest in
you guys big time!

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Abishek_Muthian
>I get to sell whatever we have created, code wise, and get the dough for it.

Many, if not all of whom you pitch your product for and are interested to buy
it would ask you to work for them. Even if that doesn't happen, get prepared
to handle lot of support calls; so factor that into the price.

>Anything I should do first, legally wise?

Invoice from your company that they are selling to you, for some token amount.
Perhaps a legal binding agreement should help as well. Get advice from a
proper legal counsel.

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pnako
I bet you had a lot of fun writing all this custom stuff. Unfortunately the
value of a custom something with custom framework and custom this and that is
approximately zero.

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not_so_sad
You can sell the code, but it's going to take work and a bit of luck to find a
qualified suitor.

Startups with the resources to purchase likely have the resources to build
themselves. And the inclination.

Your best bet is to prospect for companies who might consider the IP for a
secondary product that compliments their core offering. They'd likely want
code + customization + a maintenance period. It could be worth it.

Send me a note if you'd like to discuss further.

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disordinary
I think it's a hard sell, you can contact those competitors and see if there
is an appetite to buy an existing product in order to get to market quickly
but depending on how mature that product is I can't see there being much of an
appetite.

What's your co-founder walking away with? If they're walking away with cash
and your walking away with (non patented) IP then you got the short end of the
stick.

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rkagerer
The code may be worthless without customers. Can you take some of the
underlying infrastructure and pivot it into a different app?

As others mentioned, be sure you have clear and unhindered rights to the code
and IP.

Otherwise, take your knowledge and skills and do consulting work (maybe for
one of those competitors). Even if you walk away with no remuneration, you
have great hands-on experience in a production environment.

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ltbarcly3
You can try to sell them your app, but nobody will want it. A pile of code
without the people who built it is next to worthless, and even with the people
who built it, a product that doesn't have 'secret sauce' isn't worth anything.

If you open source it today, and give it away completely for free, you will be
lucky if one person forks or stars the repo, then never looks at it again.

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orasis
Set it aside for a month or two or six and allow yourself the space to gain
some perspective.

You’re probably too “in it” right now to make good decisions.

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ptero
Selling code will be hard, maybe nearly impossible. One option, especially if
you see other companies popping up trying to do what you already have, is to
join them.

Set up a good demo of what your code does, then approach new companies and
offer to provide it to them either for a fee for service (best) or by joining
them. Good luck.

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me551ah
1\. There are many freelancer gigs at freelancer.com and other freelancing
sides where people are looking for a custom CMS. You might be able to sell
your solution to them, though you might still need to customize it slightly
for their needs.

2\. Open source it and add a donate link.

~~~
gnulinux
> Open source it and add a donate link.

I believe this is the only plausible answer.

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sandGorgon
Put it on CodeCanyon if you want. There's a lot of similar software there that
get a lot of sales.

Also make sure you have paperwork in place that gives you right of IP. Given
that the past IP was owned by your company, this is not merely a handshake and
email.

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mikorym
After you figure out what to do with the code and vestigial structures of your
startup (lots of advice here), what are your plans?

A lot of readers are probably keen on owning a business and your reality check
can maybe turn into good advice for others.

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sideproject
Another option for you is to submit it on SideProjectors to find someone who
wants to buy (disclaimer : I run SideProjectors).
[https://www.sideprojectors.com](https://www.sideprojectors.com)

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thomasfedb
> ...create a Shopify site that he/she can manage him/herself

Not trying to be snarky, but I genuinely prefer "they" and "themself" for
talking about a generic other person like this. Also less keystrokes.

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mister_hn
If you are shutting down the company, I would make the effort to upload all
the code to GitHub or GitLab with the agreement between you and your co-
founder.

It would be a pity if that code goes lost

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paulie_a
Move on and get an agreement you can use it privately to showcase when you
look for a new job. I did that exact thing and it greatly helped in
interviewing.

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JBB_boss
I have some interest in talking to you about what you have created. We might
have a use for it. Send your contact information to info@localnursery.ca I
will reply.

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repomies691
If it doesn't generate cashflow, it probably isn't worth anything. I would
just forget the codebase and focus on how to create value somehow else.

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ThomPete
Contact me at thomas@firstprinciple.co would love to talk with you about what
you've built and see if it would make sense to continue the work on it.

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progman32
What's your intent? Sell the rights outright or sell it as some sort of
service? Do you want to create a new persistent business out of this
situation?

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lasky
Sounds like you have free rein to productize some of your IP here. Might it
make sense to turn any part of what you've built into a SaaS business?

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bitL
Shop your code around; that you didn't find use for it doesn't mean somebody
else isn't in need your code solves and could pay for it.

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me551ah
If you can't beat em, join em.

I am not sure of the details, but if you can make a Shopify plugin which
others can use you could make some money out of it.

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onreact
The code is the most value part. You can sell it or you go open source and
find a community to extend the life of your project.

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loblollyboy
Why not just use they, their, themselves?

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flexer2
Sounds like you should contact a lawyer.

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happppy
Do I want to work with someone else's code? Heck no!! Sorry, I don't mean to
offend you that your code might be buggy or can be written poorly, it's just
because I like to build things myself, plus I am not gonna invest my time to
understand someone else's code because I will be using that for a whole lot of
a time.

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e-clinton
Sounds interesting. I work at an ad agency. Is it something that brands would
pay for?

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abhishek99
Hey,

I might have a potential usecase for your code. Please contact me using the
email in my bio.

Thanks.

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owens99
I’m interested in this tech. Email’s in my profile.

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sg47
Richard?

~~~
abjKT26nO8
Karen?

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whalesalad
> Anyhow, as my payment for these past years, I get to sell whatever we have
> created, code wise, and get the dough for it.

Yikes, it sounds like you are walking away here with virtually nothing.

If I were you, I would fight for ownership in whatever is next for your
cofounder. If that means it is a Shopify store, that is fine, but you should
get X% of revenue, profit sharing, something out of this.

The code you have now is ultimately worthless and is not a good 'payment' for
the time and energy you invested into this company.

I do not think the current arrangement you have outlined is in any way fair.

~~~
a13n
As a co-founder, you accept the risk that if your company fails, you get
nothing, and you might not get compensated for your time. That's just how
startups work. High risk, high reward.

Therefore it's ridiculous to say OP deserves a % of revenue/profit/equity of
their co-founders next venture. There's no legal or ethical basis for
negotiating this.

~~~
lmartel
Assuming it's an entirely separate venture, sure.

But from the OP it sounds like the cofounder might be continuing in the same
line of business, but wants to "pivot" and jettison the now-dead weight of the
technologist.

If this is the case it seems plausible that his contributions and R&D are
still relevant, even if they're throwing out his code, and so perhaps he's
entitled to whatever stake he vested over those first two years.

~~~
creyes
This makes sense to me. If it's entirely unrelated then yeah totally. But if
they're doing a shopify store to sell these workshops then I think OP should
get some points

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sandoooo
The first thing you do is to figure out how much your trove of user data is
worth, both to advertisers and also on the blackmarket.

I keed, I keeeed.

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edoceo
If you contact those other startups, I'd try to get some cash upfront and a
"big wheel" position with them. Get paid, dump it on them, give yourself two
years to work through with them and let go emotionally and then with that cash
and experience get on to the next.

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sigmaprimus
I'm making some assumptions here but I'm guessing you meant "Customers" not
"Costumers" and also you have been putting in a bunch of work for the past two
years on your project with little to no income from it or any other source.

Unless this IP or "Code" was written by someone else let it die on the vine
with the rest of the company, write new code for your own project, use your
experience to make improvements to the new code and start fresh, it sounds
like you were using pieces of gpl code anyways.

Why would you bother taking the risk of creating a unicorn only to have your
pokects picked by your "cofounder" that quit, then sues once it becomes
profitable?

No matter what agreement you made, even if you get it notarized, your risking
much more than if you just knuckle down and do the work again yourself.

Besides it's always easier and faster to do it a second time.

