[yubrew]

It's whatever you guys decide is fair, and that depends. There are web businesses that rely on a strong sales team and you can actually hire an off-shore team, so the dev guy is not too important. There are businesses that rely on a technologically superior product, and a great dev with special background knowledge. It all really depends on what their competitive advantage is based on.

2% does seem to be on the low side though. Will you indefinitely make 2%, or will you eventually make a salary? Yet another way to look at it is comparing what you could be making at another start up, and dividing by 2% to get what should be the present value of the company. For instance, if you could be making $50k somewhere else, then $50k/.02 = $2.5 million. If it's just an idea, I suspect it is worth much less than $2.5 million.

If you really do believe in the idea, you can always ask them how they came up with the X% figure. Do this over the phone or in person, not e-mail. This way, you can see their real time reaction.