Question: While attending Georgia Tech, Alan, Brian, and Diane conceived of an innovative design for a hospital management software system, but they did not actually write

While attending Georgia Tech, Alan, Brian, and Diane conceived of an innovative design for a hospital management software system, but they did not actually write the code. At the time, they talked about starting a business after graduation, but there was no formal agreement. Four months after graduation, Alan and Brian formed a company to develop the system. They initially took the position that Diane was not entitled to share in the new enterprise because of the enormous amount of work that would be required to develop the code and make it commercially viable. Nevertheless, their lawyer suggested reaching an agreement with Diane, whereby she would receive a 5 percent equity interest in the new company in exchange for any rights she might have in the technology. Alan is a brilliant engineer. He prefers to speak machine language, rather than English. He has not been in a hospital since a week after his birth. As long as he has plenty of Diet Coke, he is happy to program computers 24/7. He will stick with a programming challenge until he has mastered it. Brian dropped out of medical school a semester before graduating. Although he was a brilliant student, he was searching for a way to cure people in a fashion that would enable him to leverage his ability to serve more than one patient at a time. Brian has great ideas, but he has a problem with commitment. He has already begun to wonder how soon he will leave this project and move on to something else. Will Alan and Brian react differently to their lawyer’s advice? If so, how and why? Should Alan and Brian accept their lawyer’s advice? What risks do they face if they do not accept the advice?


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a Alan is likely to support the lawyers advice He recognizes that Diane made a contribution to the enterprise but much remains to be done to build the product as well as the company As a result he is ... View full answer

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