Ask HN: How to legally protect significant technical IP when taking on cofounder

7 points by ldjkfkdsjnv 3y ago ↗ HN

For the last while I have developed a machine learning platform that I believe is valuable. The algorithms work, and while some are public, they are mostly only exposed via recent research papers with no public implementation/trained models. All questions aside to whether that is true, I developed the platform to support ten or so startup ideas. Probably some will not work. The idea is then to set up new startups for each idea, find a non technical cofounder, and give them significant equity in that particular business vertical.

So from a legal perspective, the IP sits in a separate company, which bills the consuming company for the compute, and the startup sits in a separate entity, from which the non technical founder has equity.

Is this common? Are there other ways to think about it?

Obviously should talk to a lawyer, and yes I know ideas are cheap, but here I have already reached 90% of the technical implementation for each idea. Other caveats, I am aware startups are hard, most fail, I should focus on one, etc.

1 comment

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vivegi 3y ago ↗

If you intend to keep majority stake in the startup (business vertical, in your terms), another alternative could be to keep the technical IP as your own property that you give usage rights to the startup (for free or for a fee). This would just be a simple contract and no need for setting up a company.

If you end up taking outside money at some point in the future, you then have an option of packaging the IP with the startup (for a higher valuation that includes the IP) or just the business alone without the IP (for a lower valuation).

You can decide on the separate company for the IP at that point in time instead of a premature optimization now.

ps: I am in the same boat and I had the same question and decided to test the business vertical's viability instead of setting up intricate multi-company structures.