Long story short, approached a friend who is already a co founder of another technology start up that has investment with an idea.
He liked the idea. It was my idea, and we started working on it building the mobile application. As a first time founder, I approached him because I felt I needed to work with someone I trusted, and wanted to work with someone with experience. We had been friends for 4 years before this. Before beginning the project, we signed an Intellectual property agreement. (my idea)...I felt that I needed to play it safe.
It is a 50/50 partnership.
1 Year later, as it stands:
- 95% of the application is completed. We were going to launch the mobile application next month
- the 5% being his work remaining. However a massive dispute has erupted causing the lawyer who has drafted our contract to get involved.
Without going into an amazing amount of detail. To summarize, my partner (who is an equal partner):
- Has not paid half of the total costs incurred, to the point out of urgency I would have no choice but to pay them.
- He would invest less time into the project to the point he would miss deadlines.
Recently, he missed a deadline 3 weeks in a row (to do the web site for the mobile application) leaving me no choice but to do it out of urgency.
- Temperamental personality. If I confronted him about the issues above, he would basically call me "demanding".
When I needed the work to get done in order to move the project forward.
- Technically gifted when he does his work (one of the reasons why I approached him)
- Partnership ended up being one where I put in more hours during the day due to him not helping out with recruiting. Leaving me to negotiate on his behalf, but unable to close deals due to him making it awkward (I needed his consent).
Anyway, the dispute errupted last week, when I needed him to help me close a deal during negotiations during the day. Instead, he cut communication and blamed me for disturbing him at work the next day, leaving that deal hanging.
I had to then get the lawyer involved as he was uncontactable. Ignoring text messages, blocking me from skype, not answering his phone etc.
Long story short:
- He is threatening to quit
- He is not willing to do his work, and is about to breach the contract
- I am probably going to get the intellectual property.
- We have not decided on a settlement for shares yet.
- His work is left incomplete.
- I have been bootstrapping on his behalf, so lost out financially.
- Never gone through the process of getting investment before. I have read that venture captalists do not like investing in sole founders. As he has worked on a project with investment I was hoping he would help me, if he leaves it is unlikely.
- How much shares should I give him as settlement?
What is the best way to move forward? Should I try to keep him on board?