7 ms·

- Write, sign and notarize an agreement that the code is either duplicated or transferred to you. - Decide who gets the data: users, you, someone. - Sanitize

- Write, sign and notarize an agreement that the code is either duplicated or transferred to you. - Decide who gets the data: users, you, someone. - Sanitize servers and services by trying to overwrite data with junk values before canceling. - Cancel monthly services and free services. - If it was good, don't let the team relationship go to waste. Talk with whoever's left / worked-with previously about doing something else. ---- Then and only then ---- - Do "consultingish" work or solve a problem you have to find a problem worth solving. - Sell something good people want before you invest too much time/money/mental health building something too much. - Keep it real: building "your amazing idea" without a feedback loop gathering critical data from paying/potential customers is #fail. - Someone though will have to step-up to be the sales/buzz builder or one will need to be found (hopefully, someone you've known for some time or a friend-of-a-friend). No useless "idea guys" allowed. - Sales/buzz person or someone will need to be the captain of the ship ultimately in-charge of everything. - Iterate fast, executing based on feedback and sales numbers. Prefer the best one you can get into if you can. (YC, hihi.;) - Everyone at the beginning gets equal equity vested over 3-5 years. First employees should get ~1% equity, more if it's an employee-owned co-op. - Don't pray for funding, sales/profit cures all. - Raise funding only if you could definitely grow faster with more money. - Skip accelerators unless you need a network and/or are relatively inexperienced. - When you get big enough, incorporate (California or Delaware C-corp). If it's s consultancy, LLP or LLC. https://clerky.com https://clerky.com

dangerboysteve 7y ago
Good advice. Remember, people may not care about the code as the company is folding. But if it turns into something and money starts to flow then people's memories become foggy.
pjmorris 7y ago
All good advice. I'm especially a fan of: > If it was good, don't let the team relationship go to waste. Talk with whoever's left / worked-with previously about doing something else. Some of my best times at work have come from the relationships left after the company crashed and burned. Companies disappear, people don't have to.
o-__-o 7y ago
It costs $500/yr to run an LLC (Incorporation/renewal fee, registered agent, and a P.O. Box), unless you have no assets and don’t plan to have any assets in the next 2 years then I would strongly recommend incorporating before you have any sort of liability. All it takes is one oops at a client to have a $1m judgement hanging over your head. LLC (in your state, don’t get fancy) sooner than later. Business insurance is typically another $500-800/yr for software startups, but I wouldn’t recommend that until you have something to protect (like money in the bank)
- streetcat1 7y ago
  Do you happen to know how much for a Delaware C Corp?. I.e. not the formation, but year to yeat maintenance?
  - aledalgrande 7y ago
    For the pure maintenance of the company we spend like 300-400 bucks.
    - streetcat1 7y ago
      Do you need a CPA or do you use tax software?
      - aledalgrande 7y ago
        We use Vcorp Services
  - o-__-o 7y ago
    You also need to maintain out-of-state business registration in the state you reside. I would not get fancy until you can afford a CPA to ensure this is all up to date
- encoderer 7y ago
  Unless you’ve studied it, you might be surprised to learn that as a principal an LLC is not offering you the kind of protection you imagine. It basically protects investors. IANAL but was surprised myself when one explained it to me.
randomsearch 7y ago
The second half of this is just great advice for all startups.
yitchelle 7y ago
Great advice. I think you just wrote the howto for doing a pivot.
estreeper 7y ago
> First employees should get ~1% equity, more if it's an employee-owned co-op. I would be interested if anyone knows more about how the co-op idea would work, also assuming you took investment. Would a corporation be formed as well as a co-op, and the co-op would be a shareholder in the corporation?
- Blaiz0r 7y ago
  There are many ways to slice the pie, and I would offer that a better way would be to give profit percentage instead of equity. When it comes to making decisions many employees won't care too much about the direction, and will slow down the process. Give your employees a fair share, but keep ownership amongst the founders.
  - C1sc0cat 7y ago
    Most sensible people are going to want shares, also not having shares is counter to the whole HN SV ethos
- C1sc0cat 7y ago
  1 By definition equity and dividends must be shared equally between all members of a coop 100 members = 1% 2 Structure the way I have seen this work the coop owns the company (or a controlling interest) which employs the members of the coop Coop structures can get complex normally most countries have special laws for this and it can be tax advantageous. Coops can take outside investment but they have to maintain 50% +1 shares to remain a coop
- k__ 7y ago
  As far as I know, if your company has 10 employees, everyone owns 1/10 of the company. If you hire someone else, everyone, even the new person, owns 1/11 of the company. The idea is: shares aren't devided by capital, but by heads. But you can usually add some clauses to the contracts, that people have to work for some kind of period, before they are considered "comrades".
kelnos 7y ago
I'm a little confused because this doesn't seem to answer the question OP is asking: how to sell the code he's been left with as a part of the wind-down.
- mcny 7y ago
  My takeaway was don’t try to sell the software you have. Try to find a problem someone has (and will pay you to fix) and try to fix it.
- conjectures 7y ago
  Sad to say it, but a bunch of code from a failed startup is probably nearly valueless without context. I think that motivates an answer based on extracting value from it combined with the context on it that a founder has.
  - kelnos 7y ago
    Oh, agreed, but it would have been nice if the top-rated comment in the thread actually explicitly said that ;)
- reagent_finder 7y ago
  You should note that OP actually asks three questions: #1 What now #2 Should OP contact the startups #3 What to do first, while also adding they don't know what's involved in selling a resource like this. If they wanted a detailed question of what to do AND WHY, they could pay a consultant. A consultant would go over around the same points as duelingjello, but also explain why. As an Internet forum answer, it honestly goes above and beyond. The answer basically strips into two -- first get rid of any and all 'ball and chain' from the old company, existing customers setups and data. Then put the IP to work, making money. The answer does skip over the general unasked question of "Can I just sell the code?" to which the answer is generally "no." You'd need an existing enterprise or source that knows the code, wants the code and can use the code, which in the modern age is just not going to happen: Startups come and go and everybody wants to make their own solution. Most engineers I know would look at "existing code" as bloat or a hindrance in general, and would look at it as "a sales team problem." If anything, you'll get peanuts for selling the actual code itself. Building a new enterprise that has a technical team to handle the code and a sales team to sell the code, potentially with an existing customer base sounds like a much better plan. Does it involve risks? Yes. Does it still answer OP's question of wat do? Absolutely.
dspillett 7y ago
> Sanitize servers ... A side note here: that can be impossible on a cloudy service where your data may have moved between many nodes over its life, and difficult to guarantee in other circumstances. On future projects consider encryption at rest for all data then all you have to worry about is destroying all copies of the relevant keys. Still try a wipe at the end of course, in the name of security in depth, in case there are keys errantly floating around out there. If you are performing a secure wipe, don't go OTT with 37 sequenced passes (if your threat model "requires" that then you have other matters to concentrate on!) don't make the final stage zeros: fill the volumes with cat pictures/videos, or if you are feeling evil use shock images instead. Give the cracker that tries to poke around something to look at! > ... and services by trying to overwrite data with junk values before canceling Also impossible unfortunately, though again you should try if only to show due diligence. Always assume that once your data is out there it is out there for good. Just like a delete is not often a real delete (just a soft delete where a "deleted" flag is set), an update often only affects the current value leaving it and any previous values still present in history or audit structures. (not that I'm saying this piece of your advice is bad, I just feel it just needs a few caveats to be explicitly stated)
- duelingjello 7y ago
  Yes. Do the best you can. Especially if they use something like paper_trail on Rails or other soft deletes. Maybe ask to the vendor to search/purge databases/files and overwrite free disk space manually too. For certain types of data and with experise, it might be wise to run your own servers (colo) and encrypt the drives. After surviving to a certain scale, you'll want to save money by running hybrid bare metal+cloud anyhow. Then, you'd have control to nuke your servers (DBAN), local snapshots and encrypted backups. Hybrid infrastructure should allow pinning systems to prevent migrating to or sending snapshots to third-parties.
  - dspillett 7y ago
    > Do the best you can. Aye. While guaranteeing the information is absolutely gone is often impossible, you should at least do what you can make it more difficult to retrieve or be accidentally revealed. > and encrypt the drives If you are using VMs then full disk encryption within the VM will work just as well, and most cloud services can offer effectively the same thing with their containers. You just have to be very careful with key management, which in some cases may be inconvenient (blocking restart until you intervene to provide keys, if you don't want them stored on or directly accessible by the same provider) depending on how paranoid you feel the need to be. Of course if you are truly paranoid, by character or by contractual necessity, keys in memory on shared infrastructure even temporarily could be an issue at which point you need "dedicated cloud" resource or colo/self-host for the affected parts of your apps/infrastructure.
sad_cofounder 7y ago
This list will help me with all the steps I need to consider now, later and in the future. Thank you duelingjello. I have a lot to learn and it's becoming obvious I need some time to grow and this will definitely help me.

dangerboysteve 7y ago

Good advice. Remember, people may not care about the code as the company is folding. But if it turns into something and money starts to flow then people's memories become foggy.

pjmorris 7y ago

All good advice. I'm especially a fan of: > If it was good, don't let the team relationship go to waste. Talk with whoever's left / worked-with previously about doing something else. Some of my best times at work have come from the relationships left after the company crashed and burned. Companies disappear, people don't have to.

o-__-o 7y ago

It costs $500/yr to run an LLC (Incorporation/renewal fee, registered agent, and a P.O. Box), unless you have no assets and don’t plan to have any assets in the next 2 years then I would strongly recommend incorporating before you have any sort of liability. All it takes is one oops at a client to have a $1m judgement hanging over your head. LLC (in your state, don’t get fancy) sooner than later. Business insurance is typically another $500-800/yr for software startups, but I wouldn’t recommend that until you have something to protect (like money in the bank)

streetcat1 7y ago
Do you happen to know how much for a Delaware C Corp?. I.e. not the formation, but year to yeat maintenance?
- aledalgrande 7y ago
  For the pure maintenance of the company we spend like 300-400 bucks.
  - streetcat1 7y ago
    Do you need a CPA or do you use tax software?
    - aledalgrande 7y ago
      We use Vcorp Services
- o-__-o 7y ago
  You also need to maintain out-of-state business registration in the state you reside. I would not get fancy until you can afford a CPA to ensure this is all up to date
encoderer 7y ago
Unless you’ve studied it, you might be surprised to learn that as a principal an LLC is not offering you the kind of protection you imagine. It basically protects investors. IANAL but was surprised myself when one explained it to me.

randomsearch 7y ago

The second half of this is just great advice for all startups.

yitchelle 7y ago

Great advice. I think you just wrote the howto for doing a pivot.

estreeper 7y ago

> First employees should get ~1% equity, more if it's an employee-owned co-op. I would be interested if anyone knows more about how the co-op idea would work, also assuming you took investment. Would a corporation be formed as well as a co-op, and the co-op would be a shareholder in the corporation?

Blaiz0r 7y ago
There are many ways to slice the pie, and I would offer that a better way would be to give profit percentage instead of equity. When it comes to making decisions many employees won't care too much about the direction, and will slow down the process. Give your employees a fair share, but keep ownership amongst the founders.
- C1sc0cat 7y ago
  Most sensible people are going to want shares, also not having shares is counter to the whole HN SV ethos
C1sc0cat 7y ago
1 By definition equity and dividends must be shared equally between all members of a coop 100 members = 1% 2 Structure the way I have seen this work the coop owns the company (or a controlling interest) which employs the members of the coop Coop structures can get complex normally most countries have special laws for this and it can be tax advantageous. Coops can take outside investment but they have to maintain 50% +1 shares to remain a coop
k__ 7y ago
As far as I know, if your company has 10 employees, everyone owns 1/10 of the company. If you hire someone else, everyone, even the new person, owns 1/11 of the company. The idea is: shares aren't devided by capital, but by heads. But you can usually add some clauses to the contracts, that people have to work for some kind of period, before they are considered "comrades".

kelnos 7y ago

I'm a little confused because this doesn't seem to answer the question OP is asking: how to sell the code he's been left with as a part of the wind-down.

mcny 7y ago
My takeaway was don’t try to sell the software you have. Try to find a problem someone has (and will pay you to fix) and try to fix it.
conjectures 7y ago
Sad to say it, but a bunch of code from a failed startup is probably nearly valueless without context. I think that motivates an answer based on extracting value from it combined with the context on it that a founder has.
- kelnos 7y ago
  Oh, agreed, but it would have been nice if the top-rated comment in the thread actually explicitly said that ;)
reagent_finder 7y ago
You should note that OP actually asks three questions: #1 What now #2 Should OP contact the startups #3 What to do first, while also adding they don't know what's involved in selling a resource like this. If they wanted a detailed question of what to do AND WHY, they could pay a consultant. A consultant would go over around the same points as duelingjello, but also explain why. As an Internet forum answer, it honestly goes above and beyond. The answer basically strips into two -- first get rid of any and all 'ball and chain' from the old company, existing customers setups and data. Then put the IP to work, making money. The answer does skip over the general unasked question of "Can I just sell the code?" to which the answer is generally "no." You'd need an existing enterprise or source that knows the code, wants the code and can use the code, which in the modern age is just not going to happen: Startups come and go and everybody wants to make their own solution. Most engineers I know would look at "existing code" as bloat or a hindrance in general, and would look at it as "a sales team problem." If anything, you'll get peanuts for selling the actual code itself. Building a new enterprise that has a technical team to handle the code and a sales team to sell the code, potentially with an existing customer base sounds like a much better plan. Does it involve risks? Yes. Does it still answer OP's question of wat do? Absolutely.

dspillett 7y ago

> Sanitize servers ... A side note here: that can be impossible on a cloudy service where your data may have moved between many nodes over its life, and difficult to guarantee in other circumstances. On future projects consider encryption at rest for all data then all you have to worry about is destroying all copies of the relevant keys. Still try a wipe at the end of course, in the name of security in depth, in case there are keys errantly floating around out there. If you are performing a secure wipe, don't go OTT with 37 sequenced passes (if your threat model "requires" that then you have other matters to concentrate on!) don't make the final stage zeros: fill the volumes with cat pictures/videos, or if you are feeling evil use shock images instead. Give the cracker that tries to poke around something to look at! > ... and services by trying to overwrite data with junk values before canceling Also impossible unfortunately, though again you should try if only to show due diligence. Always assume that once your data is out there it is out there for good. Just like a delete is not often a real delete (just a soft delete where a "deleted" flag is set), an update often only affects the current value leaving it and any previous values still present in history or audit structures. (not that I'm saying this piece of your advice is bad, I just feel it just needs a few caveats to be explicitly stated)

duelingjello 7y ago
Yes. Do the best you can. Especially if they use something like paper_trail on Rails or other soft deletes. Maybe ask to the vendor to search/purge databases/files and overwrite free disk space manually too. For certain types of data and with experise, it might be wise to run your own servers (colo) and encrypt the drives. After surviving to a certain scale, you'll want to save money by running hybrid bare metal+cloud anyhow. Then, you'd have control to nuke your servers (DBAN), local snapshots and encrypted backups. Hybrid infrastructure should allow pinning systems to prevent migrating to or sending snapshots to third-parties.
- dspillett 7y ago
  > Do the best you can. Aye. While guaranteeing the information is absolutely gone is often impossible, you should at least do what you can make it more difficult to retrieve or be accidentally revealed. > and encrypt the drives If you are using VMs then full disk encryption within the VM will work just as well, and most cloud services can offer effectively the same thing with their containers. You just have to be very careful with key management, which in some cases may be inconvenient (blocking restart until you intervene to provide keys, if you don't want them stored on or directly accessible by the same provider) depending on how paranoid you feel the need to be. Of course if you are truly paranoid, by character or by contractual necessity, keys in memory on shared infrastructure even temporarily could be an issue at which point you need "dedicated cloud" resource or colo/self-host for the affected parts of your apps/infrastructure.

sad_cofounder 7y ago

This list will help me with all the steps I need to consider now, later and in the future. Thank you duelingjello. I have a lot to learn and it's becoming obvious I need some time to grow and this will definitely help me.