Why this is the item diligence always finds
It is invisible while you are building and decisive when someone is buying. Every investor and every acquirer asks the same question: can you show that the company owns its technology?
Ownership does not transfer by default
Absent an agreement, the person who created something generally owns it. A founder who wrote the first version before incorporating owns that version personally until they assign it.
Contractors are the biggest gap
Employees are sometimes covered by default rules. Contractors usually are not. The freelancer who built your first app may still own it.
It gets harder to fix over time
Chasing a signature from someone who left two years ago, after a falling out, while a term sheet waits, is a bad position to negotiate from.
Who has to sign one
Where it gets complicated
What it costs
PIIA for every founder
Included
Included in every formation and founder package.
Questions founders ask
We never signed these. How bad is it?
Fixable in most cases, and much easier while everyone is still on good terms. The work is identifying every person who contributed and getting assignments signed now, before anyone has a reason to be difficult about it.
Is a PIIA the same as an NDA?
No. An NDA stops someone sharing your information. A PIIA transfers ownership of what they create. Most PIIAs include confidentiality terms, which is why they get confused.
Does open source in our codebase cause a problem?
It can, depending on the licences. That is a separate review from the PIIA, and worth doing before a funding round rather than during one.
Our contractor is abroad. Does a US form work?
Sometimes, and sometimes it needs local adaptation, particularly around moral rights in Europe. Tell us where they are and we will tell you which.
What does it cost?
PIIAs come inside our formation and founder equity packages at no separate charge. A standalone cleanup across a team is quoted as a fixed fee once we know how many people are involved.
