Depends on how you view the sale. If you are fully transferring rights I would just sell it to them, with the price set at 100 dollars an hour for however many hours you estimate you worked on it. If you plan on retaining rights I would ask for 20-30% of that first figure plus 10-20% of revenue generated(with some stipulation on what that number is if they give it away as a value add).
Ask HN: My firm wants my home-made project, what to do?
21–28 of 28 posts
Re: Ask HN: My firm wants my home-made project, what to do?
#22i was in the exact same situation in a few cases, even not too long ago, just on the other side. i was the ceo.
we are in webapp development, so basically everything related to that belongs to the company.
now, one of the guys did a really cool tool in his freetime and showed it to us a couple of weeks later.
my first question to him was: how much do you want for it? even though this really had no connection to any of the things we did at the time, not even the plans we had for the future.
still, we agreed on the price and he got paid out immediately.
exactly one month later a client came with somewhat similar needs for his website, so we sold it without any update.
since the the sales price was quite above the aquisition cost, and we had to do no work on it, the guy got a compensation later to become 50/50 with the company in that subject.
me buying stuff from co-workers happened many times, i think it's great when a company has an offer or an opportunity for you, other than your regular job.
it might not change a thing during workdays, though. :)
anyway, i suggest you go for it, try to get best offer you can get, but if you name the price make sure you don't look like a fool by settling in a fraction of your first offer, so price it right!
we'll try to help you if you ask :)
Re: Ask HN: My firm wants my home-made project, what to do?
#23based on what i understand, though most of the people might not agree with me 1. if you are developing something, even tough as side project on your offtime, it is usually own by the company you work for (it will be on your employment contract most of the time) 2. On the other hand, if you think you can make money on your project, and based on what i heard in_California http://en.wikipedia.org/wiki/Non-compete_clause…
To your Point 1.with the exception of only Nevada if I am correct.
Re: Ask HN: My firm wants my home-made project, what to do?
#24I think the question here is, how big is the company? Depending on how small or large the company is depends on everything.
If they are a small company, they probably would not be able to afford a large cash deal, and would probably try to sell you with royalties rather than a big cash payment.
A medium sized company, a nice chunk of cash and small royalties if any.
And a large company - it's an all cash deal.
I would go for a lump sum cash payment if you can take it, and if you can add royalties on top, more power to you. But again like previously stated, that can be a fishy area.
You are in an employee relationship, so you will never be able to audit books, or verify things that a normal founder would be able to easy reference check.
Get as much UPFRONT cash as you can. Consider royalties as a "bonus".
My 2 cents.
Re: Ask HN: My firm wants my home-made project, what to do?
#25Earlier quoted context omitted.
I am in the initial stages of the talks. The manager has mentioned about money being involved, I was looking for a "%age of future royalties of the sale" kinda thing. Yes the product can be of more than $20K as per me.
Having faced a similar dilemma in the past back when I was an student, the advice I got was that any kind of royalty-based agreement could easily get me screwed depending on how it was structured (and the company likely has more experience than you do on drafting such agreements). For example if the royalty is based on number of licenses sold, they can just give it away for free to customers and charge them a "mainte…
Yes. Something like x dollars per customer per year would be slightly less optimised but more robust and defensible.
Don't forget that by providing you with sales / revenue / customer management they are bringing a lot of value to the table.
Who will develop the product ongoingly? Who will provide patches and support? These might seem like obvious questions to you but they must be discussed and written in a contract.
Finally, make sure your contract includes sufficient legal protection. i.e. the product has no guarantees and you are not liable for any cost, damages or loss, direct or indirect. If things go ahead then you definitely need a lawyer to help you with this.
Re: Ask HN: My firm wants my home-made project, what to do?
#26I'm not expert, but there's a couple of things you could investigate:
Licensing: You could license it and then get a flat fee per license sold. This gets around the problem that someone mentioned about getting a % of revenue and then having the company bundle the product. Also, then you should sign you to a non-compete, which they should pay you for, so that you don't undercut them.
Sell outright: Figure out how much the software is worth, come up with a revenue model and then sell it for 3x sales, or something like that.
Re: Ask HN: My firm wants my home-made project, what to do?
#27Presumably you have, in place, an employment agreement and an Intellectual Property agreement. You should review them and, if necessary, discuss the situation with a lawyer who is experienced in this sort of thing. You also need to know what your employer's intention is. If your "home-made project" was not excluded in your employment/IP agreement they may feel they already own the product.
Re: Ask HN: My firm wants my home-made project, what to do?
#28>How should I go about giving it to them ??
You don't "give" it to them... They're out of order if that's what they expect you to do.