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Help, I'm being Shafted!

Started by Nfinity Mar 31, 2000 at 5:00 AM 12 replies 2.6k views

Original Post

Mar 31, 2000 at 5:00 AM

The background of my problem is such: One of my friends and myself have been trying to pull together and create a game for a couple of years now. Recently he has come into a deal that he is to produce a small 3D game for a small company. We both worked hard to knock this demo out by deadline (many sleepless nights and caffeine pills later) The demo along with some creative marketing ideas allowed us to approach prospective investors, and the company is about to take off. Here''s the problem: As it is going right now, my friend will own 51% of the company (2,100,000 shares) and he has allocated .0125 % (5000) to me. At this point in time i have not signed anything, have not been paid a red cent, and have not been approached by him or the lawyer to sign anything. I plan on approaching them and negotiating a contract, but i do not know the laws on such a situation. What would you deem as fair share of the company that you helped to build. Am i to accept "employee" status with a smile, or should i ride it out and ditch them later when a better offer comes around? Another thing that came to mind as a problem is intellectual property rights. As a game designer i have games running through my head 24/7. Everything i see in the world is viewed as "Hmm, what kind of a game can i make with that, would it be fun? who would play it?" When do these ideas become "property of The Company"? I have about 7 game concepts that i would like to bring to life, but i am worried now about divulging this information to a company (or a person) who is totally willing to screw me over. I''m sorry if this seems long winded, Thank you for your consideration and any advice you can offer. -Anonymous wikimon@hotmail.com PS> Dang this CGI/ASP thing CRAWLS

Ingenu

Mar 31, 2000 at 5:49 AM

I can''t give you exact laws and the like stuff, but I can say how that works in france.

First, try to think as if you were your friend... Having a co founder is sometimes a problem.
Second, if you were so important, go and ask for some more money (5% is a minimum)
If your friend does not accept, you can use your rights on the program made sofar, and he will be in trouble.

Law side :
When you''re working for a company in FRANCE, the intellectual property goes to the company IF you work on it while @ office and using the company hardware during office open hours.
If you work on it @ your home on your hardware you won''t have any trouble.
[I love having learn laws]

If you''re good, you can go to another company and tell them you had previously worked on that game as game designer, they''ll certainly be interested. (if the game is promising; or a success)

Hopes it helps.
(Don''t forget you''ve rights upon the game !)
(In europe this is a cooperative software production and as such each participant have the same rights as the others)

-* Sounds, music and story makes the difference between good and great games *-

ghowland

Mar 31, 2000 at 6:31 AM

Having a co-founder is a problem, but it sounds like youre totally being screwed. Unless you just didnt do anywhere close to what hes done, then you should be getting signficantly more than a fraction of a percent of the company.

Youve mentioned youre a designer, so Im not sure if you also program. Your friend could be trying to come up with your permanent relevence to the company. What can you contribute to the long run to make you an asset?

This is a question for him as a business man, but from the little I heard (and I only know what youve gone on), it sounds like youre being screwed and you should be a partner if youve spent equal time with him.

Something to understand, this is a common way for friendships to dissolve. Business and money are some of the fastest way to end them. (Aside from all the Jerry Springer situations).

-Geoff

Domini

Mar 31, 2000 at 11:02 AM

Before you begin any project, you have to make sure to get everything in writing before hand. I''ve been screwed myself. If I were you, I''d go for half of what ever he gets. You should be able to negotiate something. Don''t wait. I would try to negotiate 30 - 40% and threaten to sue for 50%.

Domini

Nfinity

Mar 31, 2000 at 12:07 PM

I thank you all for your prompt responses. I am going to go ahead and approach them with a working business contract according to my needs and expectations. I suppose i''ll have to consult a lawyer of my own to examine the strength of my claim on the company, should they decide to deny my request.

All in all if they''re not willing to give me a fair share in the company it''s really their loss. I am fairly positive that the boat will not float without me, As they would have to scrap or totally overhaul 3 of their 4 launch titles that i wrote the design documents for.

On the other hand if i sell those 5000 shares, i''d have enough money to produce a game demo of my own...

-Anonymous
wikimon@hotmail.com

DavidRM

Mar 31, 2000 at 1:15 PM

If that''s the way he sees the split, and considers it equitable, then you had best ask: Eh?

Find out what he''s basing the splits on and see if you agree with him. You haven''t mentioned what efforts the 2 of you contributed so there is no basis for anyone to make a judgment on this thread, even assuming we were given the Full Story (tm).

It boils down to: Work it out amongst yourselves, or dissolve the partnership. If one of the partners feels shafted, it''s best to deal with it ASAP.

And, because I''m curious...what the hell are you talking in "shares" for? That''s only a meaningful term if you actually sell stock. So much simpler to just use straight-up percentages of ownership. If, by some bizarre change, you ever find yourself facing an IPO, *then* worry about share counts. Before that is just being silly. Just my opinion.

DavidRM
Samu Games

Nfinity

Mar 31, 2000 at 4:21 PM

Well see, thing is we ARE facing an IPO and i AM worried about it.

As far as the demo goes, we were about 50/50 on work accomplished to that end.

As far as forming this company, I designed 75% of the games we''ve been showing to the investors but since he and the lawyer are doing the scouting i consider it equal "work".

Already i''m sure i''ve said too much, then again i didn''t sign an NDA so who cares, eh?

Basically it boils down to a 25 million dollar IPO with him getting 51% of it and me getting .0125% of it. The math doesn''t look good, and i''m not sure how strong my claim would be to ownership of the company were i to have to bring it to legal preceedings.

-Anonymous

Blah!

Mar 31, 2000 at 4:35 PM

The way I see it (and understand it):

If you worked equally on the project, you should get
get 50% of HIS earnings, thus 25.5% each (of the company of course) instead of him getting 51% and you 0.125%

But if you worked more than him, you should get more than him. Same thing, if he worked more than you, he should get more than you.

Im a kid, I live in Canada, but thats just common sense. If you worked on it and he wants to screw you over, get a good lawyer and threaten to sue.

Simple as that

Sordith

Mar 31, 2000 at 9:55 PM

Correct me if i''m wrong, as I well might be.

In a corperation situation, the person whith the majority of the stock end''s up making the decisions, right? (stock% = ownership in company... the person with 50.1% has 50.1% of the votes therefore automaticaly wins his way)

Could this be why your friend wants to keep over 50%? I''m not saying it''s right, just ''smart'' depending on how you look at it.

kressilac

Mar 31, 2000 at 11:29 PM

.0125% is not much at all. Your 5000 shares would have to be valued at 200 a share to be worth even 6 figures. If he is to get 50 some odd percent of the company and you nothing, I would say you need to go hire a contract lawyer. An agent could help you in these negotiations. An agent for his fee could help you get significantly more money from your friend. As much as I hate to say this but this guy doesn''t sound like much of a friend and deserves a piece of his own medicine. Couple of notes here, companies that don''t pay attention to their employees will fail in this industry. *period* His greedy demeanor(assuming it is not justified in some way) shows me that this company won''t last long, let alone make 25 million in an IPO. It takes a serious concerted effort to IPO. (I know VenuSoft is trying to muster up the ability now) All this money dispute shows is that he has no clue about financing, he dismisses your friendship because it will inevitably be destroyed in this negotiation process, and his employee view is slanted in his favor. My suggestion, sue to get everything you can, drop him like a bad habit, start your own company, and go after one of those other game ideas you came up with. His company is doomed to failure anyway and you don''t want that much.

Kressilac
ps This kind of press about a company will send its IPO into the tubes. The company your forming will never make 25 million assuming what you have told us in entirely accurate.

Nfinity

Mar 31, 2000 at 11:44 PM

::Kressilac
ps This kind of press about a company will send its IPO into the tubes. The company your forming will never make 25 million assuming what you have told us in entirely accurate.::

One of the reasons i am signing with anonymous, of course :D. As for dropping him like a bad habit, we''ll have to see how this discussion goes tomorrow. I agree wholeheartedly that a company is only worth as much as their members. And if his "value" for me is .0125% then i have to find out why.

As for how much of a friend he is, he has always seen the world as what will benefit him. Some people of that nature do very well in the world, but they are not generally liked by others. I know alot of people who REALLY dislike him, and the only reason he is still my friend is because i myself am very easy going. but it seems i will have to grow some teeth and look out for my own best interests as well if i am to survive in these shark infested waters.

-Anonymous

granat

Apr 2, 2000 at 11:46 PM

I would burn his car..

-- There IS something rotten in the state of Denmark --

ZoomBoy

Apr 3, 2000 at 1:02 AM

Let''s see 51% for him 0.0125% for you

Who gets the rest? The lawyer?

Is there a written contract somewhere between the lawyer and him for their ''scouting''

Your friend''s a shark but does he have the right to sign any papers on your behalf. I doubt it. Someone has a stake in that 49%; maybe they''ll side with you as long as their 49% is not threatened. There''s a deal in place for that 49%. Find out what it is.
Get an agent or lawyer to review that deal.

ZoomBoy
A 2D RPG with skills, weapons, and adventure.
See my character editor, Tile editor and diary at
Check out my web-site

Obscure

Apr 3, 2000 at 6:47 PM

Unless it is too late I would strongly suggest that you talk to your lawyer first, then decide if you actually want to work with this guy and based on that work out what you will say/ask for. It is pointless demanding if it turns out you have no rights (which may well be the case) and in that case it would be better to try a more tactful approach (such as asking why he considers your value to be so low).

Unfortunately all of this should have been sorted out up front. While you have been busy designing he may well have ben busy registering all the designs, names and logos in this sole name or "his" companies name. After the fact is too late in most cases.

Dan Marchant
www.obscure.co.uk

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