Ask HN: Where is the startup FAQ for programmer/founders | Hacker News Reader

Ask HN: Where is the startup FAQ for programmer/founders

7 pointssuneilp9 comments

I'm working on a startup (can't discuss it yet) with several others. As the sole programmer, I obviously do all the coding. The code only exists on my laptop and my personal server at rackspace.

I've been asked to for access to the code. Even though we've finally incorporated over a month ago, I haven't signed anything yet.

So I ask, what do I need to know to protect myself. Is there anything I need to sign. Do I need to worry about my partners running off with the code if I haven't signed anything.

I feel so clueless about the process, and it's been hard finding substantial information on the process.

Also, as a founder, what do I do about the non-compete agreement everyone has been asked to find. I'm not thrilled about it, especially as it requires no competition for 5 years, around the world.

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There are a handful of resources you might find useful:

http://www.gabrielweinberg.com/startupswiki/Ask_YC_Archive

http://swombat.com/founders_library

http://www.businessinsider.com/document-center

http://www.quora.com/Startup-Documents

among others.

Also, as a founder, what do I do about the non-compete agreement everyone has been asked to find. I'm not thrilled about it, especially as it requires no competition for 5 years, around the world.

Get a lawyer, review it and understand the implications. If you don't like it, come back to the other guys with a counter-proposal. Be prepared to walk if you really can't reach an agreement that everybody can live with. But do understand both sides of the non-compete thing... each party in an agreement (ideally) is just trying to protect themselves from getting screwed over.

Also, as a founder, what do I do about the non-compete agreement everyone has been asked to find. I'm not thrilled about it, especially as it requires no competition for 5 years, around the world.

I would never sign such a thing. I would take it as a huge red flag, too - successful startup founding teams shouldn't need any non-compete, let alone a highly restrictive one! If you can't even trust each other not to screw the business over at the first opportunity, you can't trust each other at all and should not be starting a business together!

Based on the bits of info gleaned from your post ("several" founders, possibly more than 3, only one coder, unclear what the others are bringing to the table, inexperienced entrepreneurs, unreasonable focus on paperwork instead of getting a business off the ground, general distrust reigns) it sounds like this thing is headed for disaster. This doesn't mean you shouldn't give it a go, but be aware that its chances may be very slim.

And, if you're the only programmer, and the only person with access to the code, you surely are in a great bargaining position. Don't sign anything you're not comfortable with - ideally don't sign anything unless it's clearly in your favour (even then, look for loopholes that could be exploited against you).

And, as others have advised, get some input from an experienced startup lawyer.

You probably shouldn't sign a non-compete now. You should sign one with a company that acquires you though.

It doesn't matter if you give other people access to your code or not. If it was done without compensation (or other agreement) and on your own time/resources it's entirely yours. The stupidest thing they could do is take your code and run. You could end up owning the whole business later.

You do have to sign over IP rights to existing/future work you do for the company once you have an agreement.

Not A Lawyer.

Check out http://www.startuplawyer.com, there is some good info there. Also, read through Quora, as there are others who have asked the same question.

IANAL, but I'm fairly sure that a 5 year non-compete is not enforceable in most part of the United States. That seems a bit much if you ask me, so definitely reach out to a lawyer.

What part of the world are you in?

California.

non competes are only enforceable for equity shareholders in California. Which I will be as a co-founder.

startuplawyer site is great, thanks for the reference!

I'm in CA as well. Happy to point you to a few lawyers that can help.

You are partially correct, it's only enforceable in partnerships and when someone is selling their ownership interest in a company. So if another company buys you, then they can enforce the non-compete with them for a few years. but if you leave or are terminated, I'm not sure that they can stop you from being employed for 5 years. Again, IANAL, but I've had a few of these conversations over the past few months.

When you incorporated, did you use a lawyer? Startup lawyers can help you with the necessary documentation that need to be signed to "protect" yourself.

We, and by that I mean the guy who is now CEO, used an online service to set everything up.

I haven't signed anything yet.

This makes me cringe. Online services might work for a single person, but as soon as you involve multiple people you really should get a lawyer. Everybody should meet with the lawyer and everybody should contribute to the lawyer's fees. Or if that is not feasible, everybody needs their own lawyer to look over the paperwork. This is especially true if you are incorporating as a C-corp versus an LLC.

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