You don't need a lawyer. You need common sense. Why do you think you need to give someone 50% of YOUR company? Is your product ready? How much more work will it take before you are ready for revenues? And when you are ready, how long will it take before you generate enough profit (not sales) that can support two full-time employees? Is this person an employee or a co-Founder? Are you giving this person 50% because yo…
Thanks for the perspective. I believe I've done it backwards, in that I know what skills I have and lack, and what this partner can bring to the table. To me, it's entirely worth splitting the company, as they'll do the lion's share of bringing it to market. What I am interested in is what needs to be put in writing to ensure that I am not giving away half the product, but actually splitting the work, capital require…
I am going to assume that you want some kind of legal protection in terms of liability. In other words, you don't want to do this as a general partnership, but as a corporation or sort so that as you move forward, there is no way that anyone can go after your personal property. In that case, I would suggest forming a LLC, as I have discussed in another post.
http://news.ycombinator.com/item?id=72291
Then, you just need to take a piece of paper and write down that going forward, you each own 50% of the LLC which encompasses all existing and future intellectual properties. By the way, I am really against giving away 50% since you have obviously put in a lot of effort in already but if that's what you want, you have the right to do so.
Then you price the LLC at some nominal value (say $500) and each of you write a check for $250 to buy 50% of the LLC. Then on the same piece of paper, you write down that the shares that each of you own (say 2,500 shares for $250) are subjected to a re-purchase agreement (which is the same as vesting but vesting applies only to options).
The idea is that you have the right to re-purchase the shares from your new partner at the original price at anytime. But part of the shares will be released from this re-purchase agreement either based on milestones or on time of service (four years, e.g.).
The reason that I don't suggest that you go to the lawyer right away is that you need to have this discussion with your new partner one-on-one and with plain English. And it is amazing how much you learn about the person going through this process. Going the lawyer will just put the two of you in an adverbial position from day one which is no way to build a team.
Once you work out everything in English, you can always bring in a lawyer (or not).
If you are still with me so far, then I can discuss the other issues. And there are lots.
--Denny--
Denny K Miu