Ask HN: Asking to co-own a web app with employer | Hacker News Reader

Ask HN: Asking to co-own a web app with employer

5 pointsjgmmo8 comments

Got hired as a marketer. Wrote software during my free time, job related. Brought that software into my work to do things faster/easier/smarter, team adopted it and now its an important part of our methodology.

Now we are moving to make this concept into a SaaS offering.

I came up with the idea, made the first implementation (proof of concept), now I will likely be the only person doing dev on the SaaS prototype.

I told my employer I want to co-own it with the company.

Now, the question is - how would this be done? What type/amount of ownership should I request?

I believe I am legally the owner of this tool. I never signed any IP agreements, and I believe creating software is outside the scope of my employment as a marketer.

Any advice, thoughts, criticisms -- would be very helpful while I contemplate next steps here.

TL;DR Made a software tool to assist with my job, now my company wants to make it into a SaaS offering, and I want co-ownership. Seeking advice, those with similar stories.

It's pretty simple. You need to negotiate a deal with your employer now, quit the company or keep working at the company with the knowledge that they will own it. By doing nothing it will be regarded as a work-for-hire owned by the employer.

How would this be done: If they are open to negotiating with you, then I'd keep the deal pretty simple. Incorporate a company, figure out the structure of the cap table, and figure out how you are going to handle any obvious possible future disputes that will affect the continuity of the business. Eg. they stop paying you, you stop working on it, etc.

What type/amount of ownership should I request? In business you should try to be equitable and leave some money on the table. Don't forget about all the time they have spent testing and giving feedback on the product. Figure out how much time each side has invested in this product, and also figure out who is going to be a better custodian of the product if there is a dispute in the future. Change the cap table accordingly. You can if necessary separate these two concepts. For example, one side can have dominant voting power over the company, but distributions of shares could be (if deemed appropriate) payed out 50/50 between the parties.

Any other next steps (eg. like getting a lawyer involved) would be a dumb idea.

Looking forward, what are the interests of both sides?

Could the company develop this SaaS offering without you? Could you develop the SaaS offering yourself, without the contacts, infrastructure and salary that the company is currently providing?

If you want a cut of the product, then it probably needs to be in a separate company. This may not be what you or the employer would like, as you're effectively getting into the same discussions about equity split, vesting etc. that multi-founder startups do.

If you just want a nice bonus based on revenue the product brings in (reflecting the value you bring, but also the value the company brings and the fact that you have a salary), then negotiate that.

I think we both want to make this thing a reality. For them, I think they believe this will be the doorway to becoming a software company instead of a service one. I've told them a million times I am about building systems, and not trading time for money... I am excited that there is some potential that I can focus on building systems with more of my work time.

They couldn't make it in-house without me; I'm the most technical guy in the firm but the idea/tool is so ingrained into our methodology now they could definitely reimplement it with some 3rd party developer. It's not rocket science, but as a service - we are confident it has market potential.

I could create and market the product without them. I could go without a salary for a little bit; but not longer than a few months without cracking into longterm savings.

I hear you on the 2 options. Bonus does sound easier; but I am starting to think maybe my pitch should be for a 'software division' - where this SaaS offering is the first project; and then I try to negotiate equity in that 'division'.

I've been in this position and it didn't go well. Definitely avoid this scenario in the future. You can ask but I wouldn't be too optimistic and the conversation may not go well and impact your relationship with your employer.

A long time ago I owned the domain name saintlouis.com and had started a site that somehow eventually came under the wing of my employer. Needless to say I didn't own the saintlouis.com domain when I left not long after.

As a follow up, you'd be better protected if you DID have an employment agreement and things were spelled out. By not having one in this situation it puts you in a bad spot. Here's some more information that discusses this type of scenario: http://labor-employment-law.lawyers.com/employment-contracts...

Thanks for the replies.

Did you ask for 50/50 or what? how did that discussion go for you?

You probably shouldn't have told your company about this product. You came up with the idea, and implemented it, yes but in the company's eyes, you did it under their watch, time, and salary (even if it's partially true). Basically, they're going to keep all the profits if this succeeds, and you're just going to be in the same position, as lead dev supporting it. Good to put in a resume, but not potentially life changing.

You just created a work for hire for your employer. You should have negotiated this earlier, and especially before voluntarily donating it to be used at your company.

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