My husband was brought on as a 4th partner of a startup last year. Unfortunately, he did not take the LLC legal docs to a lawyer to make sure the % he was being offered was fair before signing.
He currently has 8%, however I don't feel this is fair. He has not quit his day job, but has put in countless night and weekend hours for the past year into creating this application. He has put forth his own money to buy necessary hardware/software. He will be the sole person responsible for maintaining/improving the application after it is released.
No one is drawing a salary from the company at this point since there haven't been any sales yet, although the application is near completion and they anticipate selling soon. Everyone is still working their daytime jobs. One partner brought the idea, the second partner handles all legal aspects, including drafting the articles of incorporation, the third handles sales and has already found potential clients.
My questions are:
He plans on talking with the other three about this. But I'm afraid since he's already signed on to the 8%, all he can do is just hope they don't laugh in his face.
The business is currently split 36/36/20/8.
The code is available to all the partners, so he has no leverage I can think of.
Co-Founder Technology Development
He should talk to a lawyer before he raises the issue with the partners, and have the lawyer read and explain the documents he has signed. From what you've described, it doesn't look like he has a basis for additional claims, unless the other partners are willing to give him something.
Fair is a very relative concept. Consider this point of view: he merely wrote some code. Anyone can do it. They came up with the idea. Being myself an engineer, I know how ridiculous this sounds. But I've stopped counting the times "entrepreneurs" with "ideas" approached me with proposals "hey, we need someone to write the code for our idea".
Hopefully your husband learned his lesson.
He should just talk to them about it. I don't think there is much else to it. He has signed up for 8%, that's his legal entitlement.
As for what's fair, you don't mention how long they have worked on this before he started. Maybe they took a lot more risk or financial burden early on to get this going.
I think an even 25% split is usually the fair way to go... unless he comes in late and a lot of work is already done, which may be the case here.