What is the best way to handle a startup cofounder split where there is only an idea, no IP, and no co-founder's agreement?

by undergroundjanedoe. Posted on Sep 10, 2020    1    11

BACKGROUND CONTEXT: We have a drafted cofounder's agreement that was never signed and executed (extremely dumb move on my part, I know...).

My cofounder and I are now splitting up and trying to handle "custody" of our idea. What is reasonable for my cofounder to walk away with? I'm not comfortable giving away equity since there were no results (product, IP, whatever you call it) and only the concept and user research takeaways.

Any tips on how to handle this amicably and as drama-free as possible?

My rage monkey sincerely appreciates it. Thanks in advance all.


cworxnine 1

Shotgun clause might be helpful, obviously not in your operating agreement and wont be binding, but it helps establish a fair value https://sbpartners.ca/pulling-the-trigger-pros-and-cons-of-the-shotgun-clause/

  undergroundjanedoe 1

Whoa u/cworxnine thanks for the tip. Did not know about the shotgun clause. Thanks for the lookout -- I'd be curious how to assign faire share value to an unproven concept. We don't have any revenue, users, or even IP that can be assigned value. Will look into this further.

Thanks again


It sounds like the idea is not proven. If that is the case, then what is the claim? If the idea is proven then that is another matter.

If you still want to be friends then ask him what he wants out of the deal. It doesn't mean you have to agree to it but it would open the doors somewhat.

  undergroundjanedoe 1

100% correct, it's not proven. I'll make sure to understand what she is looking for in the exit strategy and let her feel heard.


scurtie 2

indemnification, get in writing that you will hold each other harmless in different approaches for the same idea, then let the best person win. Typically an early split is because of differences in opinions. If the other party truly thinks they are right, then they’ll sign it.

  undergroundjanedoe 1

Definitely plan to get this in writing. I like the mindset approach and not getting too attached to the idea. Thanks.

-JoeAnderson 2

It's literally just an "idea"? Doesn't sound like there's really anything to divvy up. Unless there's a patent on the idea or something.

  undergroundjanedoe 1

Noop. Nada.

No product, no code, no IP.

-JoeAnderson 2

Is it an incredibly great idea? Like really amazing?

  undergroundjanedoe 1

It's a very audacious concept but untested and unproven in the market.