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I'm not a lawyer, nor an accountant, not even a cartoonist (sorry Scott Adams) - so my suggestions are solely based on my experience. You don't mention how muc

I'm not a lawyer, nor an accountant, not even a cartoonist (sorry Scott Adams) - so my suggestions are solely based on my experience. You don't mention how much you have invested in the venture. If the investor is paying for everybody's salary (including yours), then the golden rule applies (he who has the gold, makes the rules). In the hi-tech space, execution is more valuable (in the long run) than finance. Does your investor understand that? If your ideas are really good, you could stall and find a new investor who has an acceptable view on equity. Given that Andrew and software team want equity - are they willing to pony up funds? that way you might be able to bootstrap the business. If you are able to bootstrap the business, then I would fire Andrew but not the team. If I were in your position, I would lock-out everybody. Shutdown the servers, etc to preserve the software. Then hardball negotiate with both Andrew and the investor - separately. At the same time seeking out other potential investors. It might take a couple of weeks, but in terms of the long-term I would see it as a risk worth taking.

CaptainAwesome 11y ago
He has invested all the capital. When we first started we were just an idea and now were weeks away from "flipping the switch" All I care about is making the product. Not the money, or potential money. Its tough, our investor has also served as a mentor and stepping away from that mentality is difficult.
- CyberFonic 11y ago
  Your response clarifies a few things (but not all). Assuming a couple things: 1) you have discussed any delays to flipping the switch arising from firing Andrew with your investor / mentor. And that he is Ok with that. 2) that your investor is prepared to pay any termination payments, especially those in-lieu of notice. 2) that you are paying your staff the going rate for the work they are doing. 3) that you have standard employment contracts - i.e. no soliciting, no rights to IP, etc You will need to write a termination letter - which basically says that Andrew can have no contact with your staff, no rights to the code nor IP, nor compete in the technical area. Ideally you have your investor there in the morning. You call in Andrew, give him the letter of termination and clearly say that if he tries any funny business then you will sue him. Then march him off the premises. You can send any of his personal stuff to his home later in the day. Then you announce to the rest of the staff what you have done and that you need to pull together to ship. Once there is demonstrable results then equity discussions can take place. Invite any disgruntled staff to leave on the spot - with the same termination conditions as for Andrew. I'm sure that some people will protest that I'm suggesting a heavy handed approach. That is true. You have cast your lot by committing to the product and your investor / mentor. Taking somebody's money comes with a commitment to them.

CaptainAwesome 11y ago

He has invested all the capital. When we first started we were just an idea and now were weeks away from "flipping the switch" All I care about is making the product. Not the money, or potential money. Its tough, our investor has also served as a mentor and stepping away from that mentality is difficult.

CyberFonic 11y ago
Your response clarifies a few things (but not all). Assuming a couple things: 1) you have discussed any delays to flipping the switch arising from firing Andrew with your investor / mentor. And that he is Ok with that. 2) that your investor is prepared to pay any termination payments, especially those in-lieu of notice. 2) that you are paying your staff the going rate for the work they are doing. 3) that you have standard employment contracts - i.e. no soliciting, no rights to IP, etc You will need to write a termination letter - which basically says that Andrew can have no contact with your staff, no rights to the code nor IP, nor compete in the technical area. Ideally you have your investor there in the morning. You call in Andrew, give him the letter of termination and clearly say that if he tries any funny business then you will sue him. Then march him off the premises. You can send any of his personal stuff to his home later in the day. Then you announce to the rest of the staff what you have done and that you need to pull together to ship. Once there is demonstrable results then equity discussions can take place. Invite any disgruntled staff to leave on the spot - with the same termination conditions as for Andrew. I'm sure that some people will protest that I'm suggesting a heavy handed approach. That is true. You have cast your lot by committing to the product and your investor / mentor. Taking somebody's money comes with a commitment to them.