Ask HN: Splitting a company between 2 co-founders.

4 pointsm0dE2 comments

While the company has became somewhat feasible, the relationship isn't working out. Currently, we are making about 3k/month and the profit is growing by $500/month. The co-founder wants to walk out and start a competition. He wants to do it by taking the code with him and white labeling it.

I'm looking for any advice or suggestion on how much I should be paying him.

Thanks everyone!

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The short answer is that because you didn't resolve this in advance, the split is whatever you two agree is reasonable.

The longer answer is that this is why it's good to have equity splits, vesting, and IP assignments in writing, typically done at the time of incorporation. Founders who stay deserve more control and a greater chance at an liquidity event. Right now, it's in your best interests to come up with a mutually agreeable solution because you probably have overlapping IP claims to the codebase and either of you could sink the company (and competitors using the same codebase) by asserting an IP claim. In that case neither of you get anything. This is why the best practice is to assign IP to the corporation.

Most importantly get in writing who owns the IP as that matters most down the road.

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