What is IP assignment?

The signed agreement under which anyone who creates code, designs, or content for the company transfers ownership of that work to the company; without it, and without real consideration, the helper may own what they built.

Why does IP assignment matter to a founder?

By default the person who writes the code owns the code. An IP assignment fixes that, but only if the person received something of value for it. A helpful early volunteer who signed nothing, or who signed an assignment with no consideration behind it, can own part of your product and hold it over you on the eve of a financing or an exit. Buyers check for an assignment from every person who ever touched the code.

What are the common mistakes with IP assignment?

Calling early helpers volunteers, which undermines the consideration an assignment needs. Letting a contractor ship code before the assignment is signed. Paying early contractors only in equity without a proper entity and paperwork, which adds wage-claim risk in states like California and Washington. Discovering the gap in exit diligence instead of at formation.

Concepts

IP assignment

On this page

Overview
Why it matters
From the room
Where founders get it wrong
Go deeper

CONCEPTLAST REVIEWED 2026-10RECORDED SESSION SYNTHESIS

An IP assignment agreement transfers ownership of work product from the person who made it to the company. Employees typically sign it inside a proprietary information and invention assignment agreement; contractors and advisors sign a standalone version. The assignment is only as good as the consideration behind it.

Why it matters

Ownership defaults to the creator, and the word you use for early helpers matters legally.

From the room

You never want to use the word volunteers with people who are helping you build the company and develop IP.

Startup securities attorney, 15 years of practicesession, Jan 2026

If someone contributes work without consideration, their IP assignment is arguably invalid, which means your helpful early volunteer may own part of your product. Paper everyone: contractor agreement plus equity, real consideration, assignment signed. The exit session made the same point from the buyer’s side: quality of enterprise means IP assignment agreements for every person who ever touched your code, and it is one of the standard red-amber-green items to clear before a letter of intent.

The October 13 startup/M&A law session distinguished assignment into your company from rights granted to a commercial partner. Even with employee and contractor assignments in place, a buyer may need to understand third-party licenses, jointly developed work, and rights to future improvements. Inventory what you own and what you may use. See Strategic partnerships: protect your IP and exit options for the pre-agreement questions.

Where founders get it wrong

The word “volunteer.”
Code before signature.
Equity-only contractors without an entity and paperwork.
Finding the gap in diligence.

Go deeper

Founder stock, vesting, and 83(b) covers the paperwork for everyone who helps.
Running the exit process covers the quality-of-enterprise checklist buyers apply.
Related concepts: Founder vesting, Quality of earnings.