Background: I am the CTO, co-founder and sole inventor of a very promising technology company (<25 people) and are sitting on a multi-billion $ opportunity, seriously!) . I now have a minority stake (25%) in this company, after my original co-founder was bought out by an angel investor who put in almost $1M and anointed himself CEO.
The problem is he is a "big jerk" (one customers' words not mine) and is running the company into the ground, because of his ego and imperious/dictatorial personality. This is narcissistic personality disorder to the nth degree. Customers - who are super eager to work with us - offline mention to me that how "difficult" he is to work with, I am very concerned we are headed for complete disaster.
I have tried talking to him to step away, mildly and couple of times confrontational. It has only led to yelling matches and strained our relationship and I am at a loss what to do. I have even tried to ask him to sell his stakes to me so he gets his $ back - no avail.
I know since the CEO invested and technically owns the "IP" (which is a nebulous term), is essentially algorithms which we developed over last few years.
Can I quit, legally "hand over" the code-base, repositories, computers etc. i.e. fulfill my legal obligations. Following that I can wholly rewrite the algorithms from scratch as separate entity? I am the sole inventor - the "brain" behind the tech and can easily do so. Would that be violating the law? p.s. I am talking to an attorney and seeking legal advice. But would like to hear similar experiences
p.p.s. We have filed for patents, but those won't be examined until 2018 or so...As with many complex systems, can be challenged in court as being public domain vs proprietary - some components use public domain algorithms.
Thanks so much in advance!
I would only trust a lawyer to direct your steps. Up front: A CEO doesn't need to be your best friend or even a likable person. (S)he needs to be competent and get the job done. If you can angle the conversation away from personality issues and towards business metrics, you may have a chance to salvage the relationship (and company).
That said, I would check to see what code assignment agreements are in place, and what anti-compete clauses you have signed and have them reviewed.
If you believe that the market can support multiple solutions within the space AND you can develop something that would be outside of the patent claims, then consider leaving and starting anew. Given your opinion of the CEO, expect that some sort of legal action will happen.
I think, since you have secured funding once, you must be having access to VC world. Try to find out another VC who might be interested in this idea. Its difficult to sell this opportunity to someone with a disclaimer that it might attract legal case. But if it's really is a billion dollar idea then people might be interested in it even with attached issues. Legal cases are quite costly so why risk everything of yours only, get someone with financial muscle to assume part of the cost and risk, even if you lose some equity. In any case in the current company you have 25% only.