A friend is helping with my startup. What's the legal arrangement we need?

My friend is helping me develop my startup. He's doing it on the side and will not be an employee.

What do I need to do now, from the legal side, to protect the company (and avoid red flags to investors)?

He's doing it all for free, and is happy to as he's using new technologies he wants to learn. The classic worst-case scenario is your friend suing you down the line when you become successful.

4 comments

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angersock 9y ago ↗

> He's doing it on the side and will not be an employee.

Then congratulations, he's a cofounder.

Treat him as such.

sharemywin 9y ago ↗

I would search unconscionable contract. I think there's some good advice about it there. Maybe search exploit my friends.

icedchai 9y ago ↗

You should have him sign some sort of work-for-hire / IP agreement. Absent such as an agreement, all of the work he does is owned by him, not your company.

Likely, he will refuse to sign such an agreement without compensation.

cody3222 9y ago ↗

Thanks for the advice. That makes sense. I think I can structure something with upside for him like right of first refusal for the CTO role when funding hits.