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> To be clear though, most of the time you don't want to own the technology behind the business because if it is deemed faulty and causes a major problem or has
by krn 6y ago
> To be clear though, most of the time you don't want to own the technology behind the business because if it is deemed faulty and causes a major problem or has a major security bug etc a client can sue not just the business but you personally for all your assets since it is your direct property and that will move forward in court, you will get no personal protection.
Thank you very much for this, that's exactly the kind of general advice I was looking for.
This question came up to me after reading somewhere, that VC-funded startups are expected (required?) to form separate legal entities for holdings and operations in order to protect their assets. Also, there was a story of then-CEO Adam Neumann registering and leasing the "We" trademark to WeWork.
So, I guess, my conclusion is, that it's safe for trademarks, but a terrible idea for code.
But what about domains names? In theory, I should also be able to own and lease them, and the legal entity would be entirely responsible for how it uses them. They can't cause bugs, can they?
> Frankly if you are not even in business yet and aren't making money you are worrying about the wrong problem, get customers, get business, make something, then optimize corporate structure once things are really moving and you have income coming through the door.
The companies in question are already profitable, and I just want to make sure that nothing unexpected can happen to them.
- davismwfl 6y agoYea, you can do that with domain names etc cause as you said they are low risk items, but not sure you really gain anything by doing that but it is doable for sure. I did this specifically with a patent I have that I licensed to my company, the company implemented it and so the implementation was on the company not me personally. I did that so I could relicense, resell or use the patent other places if the company failed without having to reacquire it etc. It is perfect for things like that overall. Trademarks and domain names all kinda are the same but if you have ideas of valuing the company you will have to have in place an explanation for how the company is protected from you holding it hostage. For example, with my patent one, the company had the right to purchase the patent at a cost not to exceed a certain dollar amount. This gave any acquirer (or potential investor) comfort that I wouldn't hold the company hostage with unreasonable demands at the last minute.
- notahacker 6y agoI don't think VCs expect you to form separate entities so that the venture they're investing in doesn't even own its own code or software, still less to do it by yourself without input. They're in the business of >10x returns, not the pennies on the dollar they might get back if a SaaS business fails but its domain name still exists and gets a bit of web traffic. If you've got something like a patent or real estate which might have significant value even if your core business operations fail it's a different story: but that's when you speak to a lawyer, with your own commercial interests in mind.