Most software contracts have a clause buried on page 6 that decides whether you own your product or rent it. Founders sign without reading it. Then, a year later — at the worst possible moment — they discover they cannot move to a new team, cannot self-host, and cannot do due diligence on their own codebase.
The two flavours of "we built it"
There are two ways an agency can deliver software:
- Work-for-hire with full IP assignment. You own the code, the design files, the cloud accounts, the data. You can take it to any other team, fork it, sell it. The agency cannot use the code for any other client.
- License-based. The agency keeps ownership and grants you a usage license. The fine print may restrict where you can host, who can edit it, or what you can do if you want to leave.
The first is what you want. The second is what cheap agencies often default to.
How to spot the trap before you sign
Five questions to ask every studio you talk to:
- "Will the MSA include a full IP assignment from delivery date forward?" The honest answer is yes, no hedging. Watch for "we provide a perpetual license to use" — that is the trap.
- "Who will the cloud accounts (AWS, Vercel, Stripe, Sentry) be created under?" Yours. Not theirs.
- "Where will the source code live?" A GitHub or GitLab org owned by you. Not their internal repo.
- "What is the offboarding process if we want to take this in-house in 6 months?" The answer should be "sign a handover doc, here is the runbook." Not "we charge an offboarding fee."
- "Can I see the deployment from day one?" If they hide the deploy behind their tooling, that is a red flag.
What ownership actually buys you
Code ownership is not a vanity bullet on a contract. It buys real things:
- Investor due diligence. When you raise, the term sheet will require proof that you own the IP. Not having clean IP assignment can delay or kill a round.
- Team flexibility. When you outgrow the agency (or they outgrow you), you can move to another team without rebuilding from scratch.
- Pricing power. If you can credibly say "we will move this in-house if needed," you have leverage on rates.
- Acquisition optionality. Some acquirers will not buy a company that does not own its codebase. The license-based agency just removed your exit.
An agency quoting ₹4 lakh while keeping IP is not cheaper than one quoting ₹8 lakh and transferring full ownership. It is more expensive — because the difference between them shows up in your Series A term sheet.
The hidden-cost calculation
Let us do honest math. You hire Studio A at ₹4 lakh, license-based. You hire Studio B at ₹8 lakh, full IP transfer. Six months later, you want to take it in-house or move to a different team.
- Studio A path: Either pay Studio A's offboarding fee (typically ₹3–6 lakh), or rewrite. A rewrite at this stage is usually ₹6–12 lakh and 3–4 months of lost product velocity. Total cost: ₹13–22 lakh.
- Studio B path: Sign a handover doc. Pay the new team's onboarding cost (~₹50k). Total cost: ₹8.5 lakh.
The cheaper studio cost you 1.5–2.5× as much in total, with worse outcomes. The "premium" of full IP transfer is one of the highest-ROI decisions in early-stage software.
What our standard MSA includes
For transparency, here is what we put in every Vybix MSA:
- Full IP assignment for all deliverables from delivery date forward, irrevocable.
- Source code delivered to a Git repository owned by you.
- Cloud accounts (AWS, Vercel, Stripe, Sentry, etc.) created under your name, billed to your card.
- Design files (Figma) delivered to your Figma org.
- Handover documentation, deployment runbook, and architecture decision records as standard.
- 30–60 day post-launch support window, then clean exit if you do not want to renew.
The takeaway
The cheapest software contract is the one that gives you full ownership at delivery. Cheaper-looking quotes that keep IP are almost always more expensive over a 12–18 month horizon. Read page 6 of every MSA. If the IP clause is hand-wavy, walk away.