{  University of Victoria  }{  humanities computing and media centre   }{  Stewart Arneil and Martin Holmes  }
Hot Potatoes: Half-Baked Software Incorporation

Players and roles:

  • Martin Holmes: principal
  • Stewart Arneil: principal
  • Tim Walzak, Innovation Development Corporation (IDC): represent University of Victoria (UVic); provide startup cash and ongoing business advice and services
  • Scott Gerrity, Humanities Computing and Media Centre (HCMC): Martin and Stewart's employer at UVic; rent space to Half-Baked Software (HBS)

Goals of company:

  • Secure intellectual property rights for principals
  • Provide core programs free for educators
  • Institute mechanism for revenue collection and sharing
  • Integrate smoothly with Humanities Computing and Media Centre activities
  • Establish licencing terms between HBS and UVic
  • IDC will recoup its capital investment by selling its shares.

Martin, Stewart and Tim discussed the interests of all potentially interested parties (principals, IDC, HCMC, UVic, potential investors, potential employees, potential public shareholders) and decided on a corporation as the legal entity for HBS. Tim recommended an intellectual property lawyer to act for HBS, to ensure that Martin and Stewart were aware of the legal implications of incorporation, and to draw up appropriate contracts.

Contracts and Agreements:

  • Ownership and Management of HBS
  • Martin, Stewart and Tim constitute the board of the company.

    • Martin Holmes: 45%
    • Stewart Arneil: 45%
    • IDC: 10%
    • large number of unissued shares of various classes

  • Intellectual Property
  • We established an interlocking set of agreements:

    • The principals have exclusive personal title to libraries of code written on private time that are used in Hot Potatoes, which they make available to HBS and UVic.
    • UVic owns the intellectual property rights to work completed by the principals on University time, which they make available to the principals and HBS.
    • HBS has an exclusive licence from IDC/UVic and the principals to develop and market Hot Potatoes and related goods and services.

  • Revenue Collecting
  • Marketing and selling of goods and services is determined by HBS in consultation with IDC. The objective is to have a manageable number of revenue streams:

    • licence fees from commercial users
    • customization contracts
    • fees from add-on programs

  • Revenue Sharing
  • Each product or service is covered by a unique contract - these numbers are approximate.

    • 20% goes to income tax
    • 10% goes to IDC/UVic as royalty
    • 10% goes to Martin and/or Stewart for administrative work
    • about 5% goes for office supplies etc.
    • about 10% goes to HCMC as hourly rent for use of a room after work hours
    • 40-50% remains as profit to company