Investor’s Dilemma : How do I Handle Unlicensed Copies of AGPL Software in a Portfolio Company

Every once in a while we receive a request from an investor or private equity firm who, in the process of conducting due-diligence on an existing or established potential portfolio company, encounters an unlicensed copy of jPOS. Often the company has released a commercial product which incorporates this unlicensed software. Investors want to know, how should we proceed and what are the responsibilities of the company vis-à-vis the license and source code?

The easiest and first answer is of course, the company should purchase a license and not rely on pirated software to conduct their business. The more subtle question is what does it imply when a start-up is willing to pirate software which is intended to be reasonably priced and positioned to benefit the authors and the overall Fintech software community as a whole?

Isn’t it risky to partner with a company that disregards good business practices, either because of bad faith or negligence?

If it were me, I’d invest somewhere else!