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Ask him to license the code for your new, related venture. Offer to pay him a percentage of revenue for that license. The risk here is the code isn't that great, so you're licensing something you're going to have to replace anyway.
Sounds like you're walking away with a good lesson about finding the right cofounder and being aligned on the vision :) Probably not ideal in your current state of mind, but very valuable.
Earlier quoted context omitted.
Based on the OP it seems like one founder had shares and the other 'founder' had options still waiting to vest. That's a pretty clear cut power dynamic no matter what the VCs recommend.
"None of our shares have vested" seems to imply they both hold options, with the other founder holding a majority of the issued options.
How far apart are the target markets exactly?
Damn, that fucking sucks, but good for you for pursuing the mission. 6 months is not super long as it sounds like it takes 12-18 months to get to PMF. curious what your founder agreement says? Does it have a clause on dispute resolution? It's shitty that your founder won't let you walk away with the code if they are doing something totally unrelated imo, and this is coming from an engineer.
Thanks for this. I think he plans to leverage little pieces of the code in his new project, but it's essentially value-less at this stage. I also think as he wrote the code and has put so much time into it there is likely a strong sense of ownership and high level of value assigned (regardless of its true value). The 12-18 months to PMF is really why I'd love to push it a little further and see what comes out of it.…
Ask him to license the code for your new, related venture. Offer to pay him a percentage of revenue for that license. The risk here is the code isn't that great, so you're licensing something you're going to have to replace anyway.
Yeah I think you nailed it with "licensing something you're going to have to replace anyway." It doesn't make sense to fight/pay for something that may not have any value.
Earlier quoted context omitted.
> with nothing to show for my time If you haven't learned a ton of stuff during this process you've been doing it wrong. That experience should be invaluable to your future career prospects.
Thank you both...I can't explain how much I've learned in this time, completely agree, even with it seemingly going to 0, I am far ahead of where I would have been had I not chose to take this risk.
- Code without the person who wrote it is mostly going to be useless. You think you can get traction quickly using his code but that's not how it works. You have a sales/marketing/product market fit problem clearly since for 6+ months, you have no meaningful users as you said. So don't worry about keeping the code.
- Seems like your co-founder has decided to pivot and wants to re-use some/all of the code for the new thing. Clearly, you don't want any part of it and you are better off starting fresh even if that means you have to get someone to do the coding again.
I think it is good that he wants to let you pursue the same idea on your own but you need legal help to ensure that you both sing contracts that allow him to do what he wants and allow you do what you want and no possible conflicts happen in the future. One way is to ensure that there is no IP sharing.
Code is mostly useless and can always be re-written. So focus on what you can do on your own to pursue the same idea since you 2 failed at it together. I would evaluate that and go from there.
Let's say you own 40% of shares, he owns 60%. The code you want was developed by a single person (him) in 6 months. If you can agree that a reasonable developer salary would be $120K/year or $10k/mo, your software has a value of $60K, with $24K belonging to you already, and $36K belonging to him. So you could offer to pay him $36K for it. If you think you can hire someone to reproduce the software for less, then that would be a better alternative for you. If you can get quotes to produce the software for less, even better: you can use those to negotiate for a lower value of the software.
At the same time, if he is planning to use anything you have built together, such as customer lists, etc., you'll have to agree on a value for them and he would have to pay you 40% for those.
Does your Founders' Agreement cover any of this? If it does, it could make things a lot easier.
One of the best pieces of advice I ever received was from a lawyer who drew up a 50-50 corp agreement for me and a business partner: while you are still on good terms with each other (now!), put in writing how you will dissolve your company and part ways; because at that time, you may not be on such good terms.
Your co-founder's code is mostly worthless at this point without the continuing involvement of the co-founder. Developers have their own idiosyncratic coding styles, and without a multi-member dev team providing continuity of design, I expect that a new developer would rewrite it as the product evolves. At the same time ... if you've been at this for 6 months already and you don't have any meaningful traction, you sh…