A Startup asking for a refund for a already built product! Which route do I take?
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Hello, We make software products for startups. For the first time in my career, a startup is asking for a refund for a already built product. Which route do I have to take in this? Here's what happened in summary. 1. Two guys were referred to me by a friend of mine with an idea 2. They were right out of college and did not have that much experience in startups, fund raining or anything else. 3. I mentored them, showed them how things work in the startup scene with product developments. 4. They were going to raise money for a 50% percent equity (50K for 50% or something like that) and I told them to self fund it, get traction and close a good round at a good valuation. If they were going to give out 50% for 50K, so you'd realize the kinda experience they had. 5. They self funded and started the development. Agreed to develop the product at 40K. 6. I did so much of research work and modeled the product. Wrote a pretty detailed SRS, my staff did the wire frames and began development. 7. The product is a crowd sourced ad social network. It's like Dribble meets video. 8. We used technologies like AWS and PHP to build this and in a MVC architecture. 9. We did about 10 custom designs for the website and sliced all of them and made the HTML and intagrated in to the code as well. 10. Then there comes a 'consultant' whose background is just web design. 11. He made these guys to believe that this was a template! 12. He showed the 'maintemplate.dwt' file we made on dreamweaver and made these guys think that we copied the designs and code from someone else. 13. The consultant they had obviously did not know what Dreamweaver Templates are. I explained to all of them very nicely that DW templates are not photoshop templates, they are something we custom made for ANY design we work on to avoid changing header and footer. 14. We have given them all PSD files, wireframes, source code and everything else we worked on the project up to now. 15. They have already paid 28K up to this point and they are now asking for a refund stating that this whole project is a template! It is obvious that the 'consultant' guy is misleading them. He's in to the same business (By looking at his work, he's just a web designer has no experience in product development) and may be he wants some work from them and my client is asking for a total refund of everything they paid. The product works perfectly fine and it is still on our staging link. So which route do I need to take for this? Should I get a consultant (software evaluater) and get it evaluated? Or should I just wait till their attorney gets back with us and proceed from there? This is the first time in my career that a client has asked for a refund this way. I would have refunded if it was a 2 or 3K job, just to keep clients happy, but this is a 28K they are asking back and we have done the work. Any help would be appreciated! Thanks!
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Answer:
Just have your attorney call them and say this: Look you can go to court and we will win, then you're in debt court fees, legal fees, and your consultant fees. Or You can pay him, fire your consultant and move on instead of being in court for 6 months to a year (scare them) Don't pay your attorney for anything else *I have no legal experience, I would just personally try this
Andrew Gale at Quora Visit the source
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