Could the Open-Source Libraries in My Product Force Me to Publish My Own Code?
Your engineering team uses open-source software every day.
It helps developers move faster, reduce development costs, and avoid building common features from scratch. In fact, most modern software products rely on dozens or even hundreds of open-source libraries.
For many startups, that seems completely normal.
Then an investor begins technical due diligence or a potential buyer starts reviewing your codebase.
Suddenly, someone asks a question your team never expected.
Which open-source licenses are included in your product, and are you complying with all of them?
Many founders assume open source simply means “free to use.” Unfortunately, that is not always the case. Every open-source component comes with its own license, and some licenses impose obligations that can affect how your software is distributed, modified, or even whether certain parts of your proprietary code must be disclosed. Understanding those obligations early can prevent expensive surprises during fundraising, acquisitions, or product growth.
Every Open-Source License Has Its Own Rules
Open-source software is available for public use, but that does not mean every license provides unlimited freedom.
Each open-source library is distributed under its own legal license, and every license contains different conditions. Some licenses are highly permissive, while others impose much stricter obligations on developers who use or modify the software.
Simply downloading a library without understanding its license can create legal risks that remain hidden until much later.
Copyleft Licenses Can Create Additional Obligations
One of the most important categories of open-source licenses is known as copyleft: GPL v2, GPL v3, and AGPL are examples.
These licenses may impose additional obligations when proprietary software is combined with licensed code.
In certain circumstances, if a court determines that proprietary software has become a derivative work of a copyleft component, the company may be required to release its own code under the same license.
The AGPL can create even broader obligations because it may apply when software is provided over a network rather than distributed in the traditional way.
Investors and Buyers Now Check Open-Source Compliance
Open-source compliance is no longer something investors overlook. Technical due diligence commonly includes reviewing open-source dependencies and the licenses governing them.
If unresolved licensing issues are discovered during fundraising or an acquisition, they may:
- Delay the transaction.
- Require expensive remediation.
- Reduce the company’s valuation.
- Create additional legal review before closing.
Addressing these issues before due diligence begins is generally much easier than resolving them while negotiating a financing or acquisition.
You Cannot Manage What You Have Not Identified
Many founders believe their engineering team already knows every open-source component used in the product.
In practice, that is often not the case.
Modern applications frequently include hundreds of direct and indirect software dependencies.
Maintain a Software Bill of Materials (SBOM) together with Software Composition Analysis (SCA) tools to identify open-source components and understand the obligations associated with each license.
Having an accurate inventory allows companies to identify potential licensing issues before investors or buyers discover them first.
Waiting Until Due Diligence Can Be Expensive
Open-source licensing issues often remain unnoticed until a financing or acquisition is already underway.
At that stage, fixing the problem may require replacing important software components while the transaction is already under tight deadlines.
Late discovery may result in:
- Removing important software dependencies.
- Rewriting existing product features.
- Losing negotiating leverage during the transaction.
These situations are far easier to manage before negotiations begin than after legal and technical due diligence has started.
Create a Practical Open-Source Compliance Process
Using open-source software does not automatically create legal problems.
The real risk comes from using components without understanding the applicable license obligations.
As your product grows, your engineering process should make it easier to:
- Track every open-source dependency.
- Identify licenses with additional obligations.
- Review new components before they enter production.
- Maintain documentation that supports future due diligence.
Building these practices early helps reduce legal risk while allowing developers to continue benefiting from open-source software.
Common Founder Mistakes
- Assuming “open source” means unrestricted use: Every library is distributed under its own license, and some licenses impose important legal obligations that continue after the software is incorporated into your product.
- Not maintaining an inventory of open-source components: Without a complete list of dependencies, founders often discover licensing issues only after investors or buyers perform their own technical review.
- Ignoring copyleft licenses such as GPL and AGPL: These licenses may create additional obligations that are very different from more permissive open-source licenses.
- Waiting until fundraising or an acquisition to review compliance: Resolving licensing issues during due diligence is often more expensive, more disruptive, and more visible to investors or buyers.
10-Minute Open-Source Compliance Self Check
- Do I have a current inventory of every open-source component in my product?
- Do I know which components use GPL, AGPL, or other copyleft licenses?
- Has my team modified any open-source libraries?
- Do any customer-facing services rely on AGPL-licensed software?
- Do we use Software Composition Analysis during development?
- Does the engineering team follow a documented open-source policy?
- Could I provide an investor or buyer with a complete open-source license report today?
If you cannot answer yes to all of these, you are not ready to enter diligence yet.
Bottom Line
Open-source software helps startups build products faster, but every library comes with legal obligations that deserve attention. Understanding which licenses apply, maintaining an accurate inventory of dependencies, and identifying compliance issues before fundraising or an acquisition can prevent unnecessary delays and protect the value of your business.
Build Legal Documents That Match the Product You’re Actually Shipping
Every startup is different, and your legal documents should reflect the technology you use, the way your product is built, and the data it handles. Our Launch Strategy and Scoping Session helps identify the agreements, policies, and legal protections your business needs before investors, customers, or buyers begin asking questions.
Book your session: https://primumlaw.com/primumlawgroup/product-counsel-program-for-tech-companies/