Founder IP Assignment: The Document That Trips Up Irish Startups at Due Diligence

The investor's lawyer asked for one document. Your legal team went quiet. The round is not off the table, but it is not on it either.

That document is the founder IP assignment deed. And in nearly every early-stage Irish startup that has not had an IP audit, it is either missing, incomplete, or was never executed at all.

Here is what it is, why it matters, and what happens when it is not there.

What a founder IP assignment actually is (and why it is not just paperwork)

A founder IP assignment deed is a written agreement that transfers intellectual property — code, designs, brand assets, prototypes — from the people who created it to the company that uses it.

That sounds straightforward. The problem is what Irish law says when you do not have one.

Under the Copyright and Related Rights Act 2000, copyright belongs to the author personally. The act of incorporating a company does not transfer any IP the founders built before that date. The company can use it, but it does not own it — unless a written assignment says otherwise.

The same principle applies to anything created outside an employment relationship. If a co-founder built the product before the company existed, or while working part-time, or under a services arrangement rather than as a director-employee, the default is the same: they own it. Not the company.

The Irish law default that catches founders off guard

Most founders assume that because they built something for the company, the company owns it. That assumption is wrong.

Irish law is clear. Copyright vests in the author at the moment of creation. It stays there until it is formally transferred. A shareholder agreement, a company constitution, a verbal understanding — none of these transfer copyright. Only a written deed signed by the owner does.

The result is a gap between what founders believe and what the law actually says. And that gap sits quietly in the company's IP register until the moment someone with legal standing looks for it.

What the investor's lawyer looks for first

When an investor instructs solicitors to conduct due diligence on an Irish startup, the IP section of that report has a predictable opening question: can the company demonstrate a clean chain of ownership from the first line of code to the current legal entity?

That chain has to be documented. It covers:

• Code, designs, and prototypes built before the company was incorporated

• Assets created by co-founders who have since left

• IP developed during a period when the founders were still employed elsewhere

• Anything built under arrangements that predate formal employment by the company

If any link in that chain is missing, the investor's lawyer notes it. What happens next depends on how significant the gap is, how close the round is, and how cooperative everyone involved is likely to be.

Three situations where Irish startups are most exposed

We see the same scenarios in almost every audit of an early-stage software company.

Built before incorporation. The most common pattern: a product is developed over 12 to 18 months, the company is incorporated when the founders decide to raise, and nobody addresses the IP question until the investor asks. At that point, the assignment is urgent, the co-founders may have different priorities, and the legal clock is running.

Multiple co-founders. Each co-founder is an author. Each co-founder owns a share of the copyright in what they contributed. If one has since left, or if relationships have deteriorated, getting a signed assignment becomes a negotiation rather than a formality.

Agency or contractor work before the company existed. A startup that used a development agency, a design studio, or a freelance developer before incorporation has an additional layer of exposure. The contractor owns the work they did unless the contract said otherwise. If that contract predates the company, it almost certainly did not say otherwise.

What fixing it looks like — and the window you have to do it

When the company still has a working relationship with the relevant founders, fixing a missing founder IP assignment is straightforward. A deed of assignment, executed by each founder and confirmed by the company, is the correct instrument. It should cover all IP created before incorporation and be backdated to the point of creation where possible.

The complication is timing. A deed executed under no pressure, in no hurry, with everyone still engaged and aligned, takes days. A deed executed mid-round, under investor scrutiny, with a founder who has left and has no particular reason to cooperate, can take weeks — or longer. In some cases, it stalls the deal.

Early is not better — it is categorically different.

If you are not certain your company owns everything it was built on, a scoping call is the right first step. It takes an hour and it is free. Book your call at 8bitip.com.