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I live in UAE and I've built a web portal all by myself. I have been looking for a partner to kick start the product. I've been contacted by 2 guys from Canada who would like to run product there. One can make sales and the other can pitch for investors. They are demanding the copy of my software once we enter into partnership.

They just have started with me and I haven't seen their performance and results yet. How can I protect my sweat equity in new partnership? Are they really worth to have copy of software from the beginning?

Should I also ask their contribution which should be equivalent to my sweat equity?

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Why, exactly, do they want a copy of the code?

contribution which should be equivalent to my sweat equity?

This will be a problem for them for exactly the same reason that it's a problem for you. Why should someone in a different legal system pay you any money? Why should you hand over code to someone in a different legal system?

I assume that the prospective partners are offering to sell your platform. They basically need a demo and you can provide that for them, without handing the code over.

Just offer to host it for them and to customize it as necessary for them as needed for demos.

If this does not work for them, then you do not have anything for them. It's that simple.

The trust is going to have to be developed by doing actual business with them. They need to find customers for your web portal system. Then they should be able to collect a deposit of some kind and you should see some revenue that would justify providing more to them than a live site demo.

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That's what I've thought of but those guys are keep insisting to enter into partnership where they can have access to code. They wrote – asif Dec 3 '11 at 8:21
They also wrote "We have been advised by our lawyers and mentors to obtain this information. Incorporation as a legal entity is a prerequisite to finding investors, not a corequisite." I think partnership agreement is based on mutual understanding not based on countries law. Am i right on that? – asif Dec 3 '11 at 8:55
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You're in over your head. You need legal counsel that can understand the issues involved in dealing internationally. And it will cost a lot. Partnership issues would be complex anyway, but the international aspect makes it even more so. I personally think you need to select a very simple business model that satisfies and protects you, such as a completely hosted solution so you don't have to hand out source code, and tell the partner candidates that they can take it or leave it. A lot of times, the expense and hassle of legal due diligence can cost more than the business opportunity is worth. – user2757 Dec 3 '11 at 21:04
Why not start your negotiations by saying that the agreement is going to be covered by UAE law, and ask your own lawyer how much it would cost to set up. That'll probably be a lot cheaper (from your point of view) than trying to figure out how Canadians do things in some goofy foreign language and legal system. – James Moore Dec 18 '11 at 0:24
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I wouldn't. Until you see their performance, I wouldn't give them anything.

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