Here is a terrifying fact: In many jurisdictions, if a co-founder writes code on their personal laptop before the company is incorporated, they own that code, not the company.

If they leave, they can legally take the code with them, or force you to pay royalties to use it. This is the Intellectual Property (IP) trap.

<strong>The IP Assignment Agreement</strong>

This is a non-negotiable document. It states that everything created for the venture—code, logos, business plans, customer lists—belongs to the entity, not the individual.

<strong>The “Moonlighting” Risk</strong>

Are you or your co-founder keeping a day job while building the startup? Be careful. If you write startup code on your employer’s laptop or during office hours, your employer might have a claim to your startup’s IP.

<strong>Bringing Prior IP</strong>

What if one founder brings a patent or a codebase they built years ago?

Scenario A: They license it to the startup (they keep ownership).
Scenario B: They assign it to the startup (usually in exchange for more equity).

You must define this immediately. Investors will not put money into a company that doesn’t own its own core technology.

<strong>How CoFounda Helps</strong>

Our workflow specifically prompts for “Prior IP.” We ask: “Did anyone bring existing assets to the table?” If yes, we guide you on how to value that contribution so the equity split reflects it, and ensure it gets legally transferred to the company.

<strong>Conclusion</strong>

Don’t let a copyright technicality kill your exit. Assign the IP early, while everyone is still friends.