Cease working on the project until the situation is resolved.
Package up everything you have related to this, mail, I/Ms, code, everything. Any paper notes, any receipts, anything you did to track time. Document everything, make several copies. Don't delete information which is inconvenient or contradictory to your story, if it's digital it already exists somewhere else anyway.
The conflict may not be resolved in your favor, though the lack of any written contracts, ownership agreements, etc. is going to be a major stumbling block in any litigation against you.
Establish a fair value for your labor, what was the opportunity cost to you for the 1200 hours you worked on this instead of getting paid? Don't go nuts here, if you get paid $50/hr for contract work then that's a reference for a dollar value for your time.
Establish a value for —for lack of a better term— your good will: the intangible contributions, ideas batted about, subtle shifts in the product/business strategy, and your ongoing contribution of such.
Finally, how much would you take to walk away, handing over the code, all rights, etc, for zero equity, zero credit?
Now, ask yourself some questions:
- what's the value of the product overall today? Is that based on real revenue? potential revenue? pie-in-the-sky valuation? sum of all labor/expenses?
- is your friendship with your co–founder worth more or less than the "potential" monetary value of either the 50% or 40% equity stakes, or the sum of your contributions and your walk-away value?
- is the relationship truly poisoned? Can it be rehabilitated? Can it be rehab'd with you working together? Or would it be better for you to split amicably?
- is any of the monetary value at stake worth more than the potential cost to litigation? Or than the personal cost if there's a bitter split between you?
- would you have come up with this idea, put 1200 hours into it, without the cooperation & dialogue with your co-founder?
Talk to a lawyer, learn what your options are.
Possibly talk to your "co-founder" about mediation, bear the expense equally, it'll cost less than either litigation or years of bitterness.
If you have the code base, you have a lot of power. The worst thing you could do right now is launch the product without having this conflict resolved.
I walked away from a startup after 18 months of work when the founder changed the terms of the organization of the company drastically. A number of us had worked together previously, and worked for that 18 months on mostly a handshake. We're on cordial terms now, years later, but not what I'd call friends. My lesson learned there was: if the ownership structure isn't documented promptly and up front, you don't have a startup, you have a lawsuit waiting to happen.
One possible way to "timestamp" your entire code tree might be to zip it up, cryptographically hash the result, and then print out the hash and physically sign it with a notary.
I have no idea how legally useful this might be. I'm sure it would be legally difficult to explain. :-)
I've wondered before about whether posting an MD5 hash of a snapshot to usenet or a bunch of free mail services (Gmail/Yahoo/Hotmail) might serve as a "beyond reasonable doubt" method of proving you had a specific bunch of files on a particular date. It _should_ be possible to argue that the likelihood of me being able to subvert Google's and Yahoo's and Microsoft's mail servers all at the same time is effectively none, and subverting every usenet server in the world even smaller.
I know where I come from (NSW Australia) there's already established legal recognition of MD5 hashes, they use them to verify authenticity of traffic enforcement camera data.
Cease working on the project until the situation is resolved.
Package up everything you have related to this, mail, I/Ms, code, everything. Any paper notes, any receipts, anything you did to track time. Document everything, make several copies. Don't delete information which is inconvenient or contradictory to your story, if it's digital it already exists somewhere else anyway.
The conflict may not be resolved in your favor, though the lack of any written contracts, ownership agreements, etc. is going to be a major stumbling block in any litigation against you.
Establish a fair value for your labor, what was the opportunity cost to you for the 1200 hours you worked on this instead of getting paid? Don't go nuts here, if you get paid $50/hr for contract work then that's a reference for a dollar value for your time.
Establish a value for —for lack of a better term— your good will: the intangible contributions, ideas batted about, subtle shifts in the product/business strategy, and your ongoing contribution of such.
Finally, how much would you take to walk away, handing over the code, all rights, etc, for zero equity, zero credit?
Now, ask yourself some questions:
- what's the value of the product overall today? Is that based on real revenue? potential revenue? pie-in-the-sky valuation? sum of all labor/expenses?
- is your friendship with your co–founder worth more or less than the "potential" monetary value of either the 50% or 40% equity stakes, or the sum of your contributions and your walk-away value?
- is the relationship truly poisoned? Can it be rehabilitated? Can it be rehab'd with you working together? Or would it be better for you to split amicably?
- is any of the monetary value at stake worth more than the potential cost to litigation? Or than the personal cost if there's a bitter split between you?
- would you have come up with this idea, put 1200 hours into it, without the cooperation & dialogue with your co-founder?
Talk to a lawyer, learn what your options are.
Possibly talk to your "co-founder" about mediation, bear the expense equally, it'll cost less than either litigation or years of bitterness.
If you have the code base, you have a lot of power. The worst thing you could do right now is launch the product without having this conflict resolved.
I walked away from a startup after 18 months of work when the founder changed the terms of the organization of the company drastically. A number of us had worked together previously, and worked for that 18 months on mostly a handshake. We're on cordial terms now, years later, but not what I'd call friends. My lesson learned there was: if the ownership structure isn't documented promptly and up front, you don't have a startup, you have a lawsuit waiting to happen.