A composite case study. Names, sectors and timelines are changed. The pattern is drawn from real Irish partnerships.
The MVP had been built before the company existed. Two of the three eventual founders had written the first version as a side-project. A contractor in Eastern Europe had rewritten roughly forty per cent of it the following year. None of this had ever been formally assigned to the company.
IP ownership is the single most common late-stage closing condition that nobody saw coming. The founders almost always think it is sorted. The investor's lawyers almost always discover that it is not.
- Pre-incorporationTwo co-founders build an MVP as a personal side-project on personal hardware.
- Month 0Incorporation. No IP assignment from the founders to the company. Constitution silent on IP.
- Month 4Contractor hired offshore for backend rewrite. Standard freelance contract. No IP clause.
- Month 14Seed round. Lead investor's solicitor requests a full IP audit.
- Month 15Audit surfaces three problems: founder-owned IP, unassigned contractor IP, and one open-source library used in a way the licence does not permit.
- Month 16Closing delayed by ten weeks. Contractor renegotiates a one-time assignment fee. Open-source issue refactored out of the codebase.
The early warning signs
- Code written before incorporation that was never formally assigned to the company.
- Contractors paid via informal invoices with no IP assignment language in the engagement.
- Founders unable to produce a clean chain of title for the core product.
- Open-source dependencies adopted without a licence review.
- The phrase 'we'll sort that during diligence' used at any point in the first eighteen months.
The conversations they never had
- Who owns the code we wrote before this company existed, and how does it become company property?
- What does our standard contractor IP assignment clause look like?
- Have we audited our open-source dependencies for licence compatibility?
- If we sold the company tomorrow, could we produce a clean IP schedule?
"We thought writing the code together meant the company owned it. It didn't. It meant we owned it personally, and the company was using it without a licence."
What PartnerReady would have flagged
- HIGH risk on IP: pre-incorporation code never assigned to the company.
- HIGH risk on IP: contractor work without IP assignment language.
- MEDIUM risk on IP: no documented open-source dependency review.
- A specific recommendation to execute a founder IP assignment and a standard contractor IP clause within thirty days.
Questions to ask yourself
- If an investor's lawyer asked tomorrow, could you prove the company owns its own code?
- Have all your contractors signed IP assignment language?
- Do you have a documented open-source dependency review?
- What was the date of your most recent IP audit, if any?
The PartnerReady check will usually surface the underlying risk in under ten minutes.
Twenty questions across equity, exits, IP, decision-making and commitment. No account required. No data leaves your device until you choose to generate the report.