[drusenko]

i'd highly recommend having "the talk" sooner rather than later. everybody agrees on sharing when the stakes are small, but when things become successful, you'd be surprised how fast people can change their perspectives.

if you are the main technical person who has built the product, you should have at least 20% of the equity, if not split 50/50 with your co-founder (that would be fair). if one of you put more money or time into it, the numbers can be adjusted appropriately.

the best construct for dealing with equity also happens to be vesting. you don't need to "grow" your share as time goes on, it just naturally "grows" the longer you stay, but you've agreed upon the total amount from the beginning and it's committed to you.

i've gone into business with friends several times. it's not that you can't pull it off (i have) or that you don't get into disagreements about compensation/equity (we have) -- it's just not worth the potential strain on the relationship to leave it an open question, as opposed to agreeing early on.

[goofygrin]

We've had "the talk" multiple times and have had paperwork for a while, just nothing signed (so I consider it worth nothing).

I renegotiated more equity with the last round of work.

I talked to him tonight and we're going to get the paperwork updated and get everything squared away now that things are picking up. He also got sold a key man policy, so there's some paperwork there that we have to do.

[drusenko]

perfect, it sounds like you are a lot more far along than you originally sounded to be... there's nothing wrong with being trusting, it's just that the longer things go, the larger potential burden it becomes on the friendship, and by sorting things out, it sounds like you're on the right track :)