How to incentivise current employer in future startup?


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I am currently employed by a company whose core business is not IT-related but I have developed a few applications that are central to some crucial business processes and I want to create a startup around them.

I have therefore anounced my intention to the boss, explaining that I planned to have him as first client to continue to maintain and improve those apps. The deal I proposed was that they transfer the intellectual property of those applications to me and I will give them preferential terms as first client + make sure the transition is as smooth as possible.

Although he agreed in principle at first, he now wants to make the IP transfer conditional on a scheme (to be defined) that would show his clients that I am still committed to the company because he considers that I am a key person and wants to make sure his clients are not under the impression that I am gone.

My questions:

  • What would be the main pros / cons to have my current employer having some equity (he would accept non-dividend / non-voting shares)? (That's his proposal and I can see at least 1 con: my future potential clients will be his competitors and might see him being a shareholder as a conflict of interest)
  • Are there other ways to make our relationship look closer than a pure commercial relation?

Incentives Equity Employers Intellectual Property Conflict Of Interest

asked Jun 1 '12 at 02:02
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Assylias
103 points
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  • you mean "Although he agreed in principle at first, he now wants to make the IP transfer conditional on a scheme (to be defined) that would show his clients that I am still committed to the company because he considers that I am a key person and wants to make sure his clients to NOT get the impression that I am gone" ? – Henry The Hengineer 10 years ago
  • Yes absolutely! Fixed. – Assylias 10 years ago
  • Your current employer is not in the IT business but their clients know you exist and they think you being an employee offers some sort of guarantee you'll stay on? – Jeff O 10 years ago
  • @JeffKO development is not part of my job description but I happen to do a lot of it to facilitate my and others' job. I used to be a developer in a previous life. – Assylias 10 years ago

1 Answer


1

The existing clients are a red herring here. Whether you are an employee, contractor or provider, as long as the work gets done, they shouldn't need to know the nature of the relationship between you and your current boss.

The remaining answer is simple: Draw up a contract between your current boss and your new business, detailing what needs to be done against what payments, and stipulate the agreed IP transfer.

That said - a delayed IP transfer could be a recipe for disaster - what happens if the contract is breached before the IP transfers, or or or or. Seek a lawyer.

answered Jun 1 '12 at 06:53
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Nick Stevens
4,436 points
  • I had actually taken the question seriously without considering that it could be a red herring. Food for thoughts. Thanks. – Assylias 10 years ago

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Incentives Equity Employers Intellectual Property Conflict Of Interest