

Ask HN: Being pushed out of startup and getting paid for work - helpwithpayout

I was going to start a startup with a couple of friends, but due to some irreconcilable differences, I am being forced to leave and asked to sign a release on my work and termination papers.<p>We calculated that the small amount of work I had done up to this point was worth a few thousand dollars. I am asking for the money up front, but they want to put it on paper that they will pay it to me after their first funding event. I told them I would do some research into what is typically done in this situation, as I would prefer to have the money up front.<p>Does anybody have any idea what is typically done here? If they completely remove the code I wrote do they need to pay me at all? Sources would be great as well so I could show them.<p>Thanks.
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milkshakes
What type of paperwork do you have so far? If you don't have any, and you have
been the one actually developing the product, you hold all the leverage. They
will have a great deal of difficulty raising if they don't own the IP, and in
the absence of any previous written agreement that assigns the IP to the
company itself, it's yours to do what you want with.

I certainly would not sign any sort of release unless it included language
that commits the company to compensate you by a specific date. That way, by
that date, they will either have to pay you or forfeit their right to your
work.

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helpwithpayout
I've been given a "Confidential Information and Invention Assignment
Agreement" as well as a "Termination Certificate". Basically giving ownership
of my IP and ending my work. No paperwork before this.

We are all technical, we all wrote code. My contributions to the code are non-
trivial and useful, but they could ultimately take out my contributions and
create something else on their own that has the same results. If they removed
all of my code contributions, would I still be in any position to ask for
compensation for my work?

I think simply having it in the contract that I'll be paid by a certain date
sounds like a good plan.

~~~
milkshakes
If they're asking you to sign over your IP, the way I would interpret that is
they are aware of the complications that arise when fundraising without having
IP airtight. It's a question that every investor will ask, if not at first
then certainly in diligence. If there's any possibility that your
contributions were 'novel' (in the legal sense), then what's more relevant
than how easily they could replace those contributions having seen how you
solved the problem the first time is how core your contributions were to the
product itself. If what you collectively have built depends on what you
personally have built, and cannot function without it, and raising money is
how your ex-cofounders plan to fund their operation, I would not want to be
them. You can basically set your terms. On a final note, if this is the first
paperwork you've seen, I'm curious as to what exactly the "termination
certificate" purports to terminate.

Edit: I am not a lawyer, but I have been around many early stage fallouts. If
you'd like to talk to a lawyer, my friends at LawGives would probably love to
help you out.

