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Co-founder feuds at L.A. tech start-ups show how handshake deals can blow up

Fenwick & West corporate attorney Amir Hassanabadi was quoted in a Los Angeles Times article about the rancor and lawsuits that often bedevil tech company start-up co-founders who rely on a “handshake deal” instead of a signed document specifying each party’s involvement.

The Times’ article cited companies like Tinder as examples of start-ups whose explosive initial success was followed by acrimonious co-founder disputes.  

Hassanabadi told the Times, "Entrepreneurs are so psyched about their product and business that they don't think about the worst case," and cautioned that the founders must invest time and money to establish a company’s “bedrock.” 

Hassanabadi, who the Times reported represents 15 startups, elaborated that newer clients are seemingly aware of their predecessors’ mistakes. But just in case, Hassanabi underscored that all tech company co-founders should go out for dinner on day one, sort out who gets credit and is responsible for doing what, and then, most importantly: Put it in writing. 

The full text of the article can be found through the Los Angeles Times website