[GlibMonkeyDeath]

Personally, I think you may have already gotten a great deal if the angel/co-founder is willing to do a 50-50 split and not take a salary (or get paid in equity in lieu of salary.) Is your co-founder now demanding to be paid in salary/equity after they agreed (I assume this is written down somewhere?) otherwise? If this is a "handshake agreement" situation, then I guess you are in the process of learning an important business lesson...

That said, fairness in business has nothing to do with your or your co-founder's personal financial situation, other than the constraints of reality (i.e., you simply can't work without a minimum amount of salary.) Frankly your co-founder should be paid in something (equity) if they are not drawing a salary. Theoretically, ownership and compensation should reflect what each of you are bringing to the company. In fact, your co-founder is actually getting compensated less than you while investing their own money - that means you are already better compensated than them. Is that "fair"? Maybe, maybe not, you guys have to agree.

But get a written agreement - if this already exists than just stand by it.

[throwawayround]

Our arrangement over the past year was implied, so yes, effectively a handshake agreement. I don’t have an issue with him taking a salary when we can afford it. The problem is that for the company to maintain runway and keep me full-time, he would likely need to forgo a salary that he doesn’t actually need.

What confused me was how he framed it. First it was about “recouping some of his investment,” and when I pushed back that this isn’t how early-stage compensation works, it shifted to “saving money for family and legacy.” Both are understandable personal goals, but taking salary for those reasons directly increases the company’s risk at a stage where survival comes first. That mismatch is what I’m trying to sort out.

[GlibMonkeyDeath]

Again, forget about who "needs" what. The basic problem is that you don't have a written agreement. Time to negotiate with your co founder and get something signed. I obviously don't know anything about each of you, but if you are truly each contributing 50% to the success of the company then your angel investor co-founder is not getting 50% of the value at present, so has, in this scenario, a point.

I've seen lots of best friend co-founders end up not being able to be in the same room together eventually. Most of these situations boil down to fundamental misunderstandings that could have been addressed at the beginning. That's why signed employee agreements (where compensation, equity, vesting, and expectations are clearly laid out in black and white) are a must.