It is great to see such an active community of entrepreneurs helping out each other. I`m posting here to get some advise regarding partnership agreement in a collaborative product development.
We are a startup company in High Performance Computing technology. We are interested in collaborating with another startup company in Financial Services. We both have decided on a project that sounds promising to both of us.
However, we are yet to work out numbers and agreement. The work involved in development of the product is nearly equal for both the companies. However, our company will have more time and money investment for the maintenance and upgrades.
We are a very young startup company that we are yet to officially launch in a full scale. The other startup company is in business from past 2-3 years in the financial services with some moderate revenues.
I need advise regarding what should be the agreement like ?
I. Regarding Intellectual property rights:
a. How can the IP rights be effectively preserved ?
The project involves code development by both the parties and integration of these codes.
a) Should it be based on the revenues the product brings in ?
Here, I fear that there would be numerous issues regarding cost of investment by both the parties etc.; accounting and probably it might result in mistrust etc.
Further, I do not have a very clear idea of the market. They see a great application of the product. I too believe the market size is great but do not have a concrete idea.
b) I would prefer asking for one time payment and that maintenance costs to be collected from users based on usage. However, the other company is also a startup company and may not agree on the one-time payment. That would be a serious hit on their cash reserves.
I request members to advise me on this situation. Further, if you can provide some examples, probably, I can better learn making such deals.