We met at a hackathon, developed a new business
application, and registered a company.
We did not have money for a lawyer, so we
drafted an agreement ourselves, which set out the shareholding. We all signed
There was some work done
on the app and there was a rough prototype. We didn’t generate any sales so we went our separate ways. One member
of the team continued to develop the app and found a test site. With a
little more work it was launched and sold through the Apple App Store. Sales began to pick up and eventually
reached $200K in the first year.
The shareholders all meet
to discuss what to do. Some wanted to
take their share of the profits. The developer said he did all the work and was
entitled to a larger share of the profits and that the business needed the cash
The shareholders were
split 50-50 and could not reach a decision. The developer said he was quitting and setting up on his own. The others
claimed they owned the intellectual property. Each had a different version
of what they agreed to do when they started the business.