Our startup failed because my business partner wanted to just be the "idea guy" who designed the screens, while having me code it and do all the heavy work. Initially, this was going to be a 50/50 split, but after working on it almost full time for about 6 months, I ran out of money.
He had a pretty big savings account and came from a well-off family, so he agreed to front me basically just enough to cover my rent while I worked on the app. We agreed that since he wasn't really contributing much as far as manpower or hours logged, he could help justify his stake in the ownership by contributing monetarily.
After a couple of more months, we had a working, functioning app that was about 80% finished, but we started to butt heads on some ideas and he claimed he was frustrated by the fact that the app wasn't completely finished (even though we had changed scope and redesigned the entire app no less than three times).
He used this as an excuse to renege on our initial 50/50 split idea. Instead of honoring our deal, he opted to claim complete ownership and write me out of the picture.
Another way someone could look at it: He saw the app was starting to come along and was getting actual beta users, and he got $dollar$ signs in his eyes and decided to be greedy.
Both he and I were young and naive at the time, and the whole project had essentially been built on a handshake deal, because we didn't want to spend 10 grand on lawyers and paperwork before we even had a product worth anything.
I had spent a year working on an app, barely making ends meet and living off of credit cards, but because I was trusting and naive, he was basically able to screw me over and walk away with everything. His name was on more of the paperwork and he was the primary signer on the bank account. I could have fought it, but at that point I didn't have the energy or the desire to even work with him any more.
The joke is on him, though. Without me around to actually write the code, he never did manage to finish the last 20% of the app, and here we are almost 10 years later. After all that, he never managed to get the app out of beta, and he never made a penny off it.
The end lesson I learned: Don't invest time and energy in an idea or a partnership if you aren't willing to spend the money up front to lock down the legal aspect, because by the time you have enough traction and money to lock it down, it will be too late!
Money and greed corrupts people. Period. When someone has the possibility of millions of dollars suddenly seem like a real possibility to them, you might be surprised by just how quickly they turn on you!
Unfortunately, he had solidified parts of it legally, but not the parts that benefited me.
And honestly, even if that wasn’t the case and I could somehow argue that he didn’t own any of the intellectual property for any of the stuff he helped design (which I seriously doubt I could do), we are talking about code that is ten years old by now.
I could always re-design the basic idea and re-code it from scratch, but that is both time consuming and risky (since it would be difficult to completely separate all of the ideas that he might have owned from the ones I had).
I’m currently making good money as a full time salaried employee at a company that I enjoy working at. I’m afraid that the cut-throat, high stakes appeal of a startup is somewhat lost on me at this point.
Isn't there a middle way between a handshake deal and 10K on lawyers, meaning that you write down the terms in paper in a wording that sounds right to you and then sign off on it?
The interesting thing was that I actually did send him an email with an outline of the terms, and when he got the email he verbally said, "looks great! let's do it!".
I was too dumb and naive to catch on and realize that his verbal agreement was worthless, and I moved forward without ever getting anything explicitly printed out and signed.
He had a pretty big savings account and came from a well-off family, so he agreed to front me basically just enough to cover my rent while I worked on the app. We agreed that since he wasn't really contributing much as far as manpower or hours logged, he could help justify his stake in the ownership by contributing monetarily.
After a couple of more months, we had a working, functioning app that was about 80% finished, but we started to butt heads on some ideas and he claimed he was frustrated by the fact that the app wasn't completely finished (even though we had changed scope and redesigned the entire app no less than three times).
He used this as an excuse to renege on our initial 50/50 split idea. Instead of honoring our deal, he opted to claim complete ownership and write me out of the picture.
Another way someone could look at it: He saw the app was starting to come along and was getting actual beta users, and he got $dollar$ signs in his eyes and decided to be greedy.
Both he and I were young and naive at the time, and the whole project had essentially been built on a handshake deal, because we didn't want to spend 10 grand on lawyers and paperwork before we even had a product worth anything.
I had spent a year working on an app, barely making ends meet and living off of credit cards, but because I was trusting and naive, he was basically able to screw me over and walk away with everything. His name was on more of the paperwork and he was the primary signer on the bank account. I could have fought it, but at that point I didn't have the energy or the desire to even work with him any more.
The joke is on him, though. Without me around to actually write the code, he never did manage to finish the last 20% of the app, and here we are almost 10 years later. After all that, he never managed to get the app out of beta, and he never made a penny off it.
The end lesson I learned: Don't invest time and energy in an idea or a partnership if you aren't willing to spend the money up front to lock down the legal aspect, because by the time you have enough traction and money to lock it down, it will be too late!
Money and greed corrupts people. Period. When someone has the possibility of millions of dollars suddenly seem like a real possibility to them, you might be surprised by just how quickly they turn on you!