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I'd suggest you to buy him out, but before doing that pen down every possible expense you may have done for this business and see what your business's current situation is. If it only started a few weeks ago and a/c to him it is worth $24K, he prolly is trying to milk money out of you. Just make sure you pen down every single penny spent for this. It is possible as you may have kept the receipts.<br />
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Secondly, do not give him 5% equity. He is not willing to work after a few weeks but still wants to enjoy 5%, that's absurd.<br />
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Now, do you think you want to invest your time on this business and does it have the potential? If you are okay with going ahead then follow the first thing. Also, make sure everything is written and stamped as per the law so that there are no claims in future.
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</blockquote>I am sorry to ask you these questions:<br />
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Did you incorporate in some way and he has 50% ownership now or it is just a verbal agreement?<br />
Do you have any kind of contract or agreement with you or third parties that mention your ownership split?<br />
Do you have shared ownership assets of any kind?<br />
What prevents you start working on your own project?<br />
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As said by our fellow members, from now on, you should always do solid contracts if your are going to get into some agreement with your partner. It is much needed because now you have an abandoning partner that not only jumps ship but wants money in a situation in which any friend would say I am sorry to bail.<br />
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If you need me to overview any agreement or anything just hit me up.<br />
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I have a personal story regarding this. After law school we set up business with a friend of mine in a very nice office in our home town. We had an architect using some of our office space and paying rent. The architect made it very difficult to coexist for everybody. All the time collectors were coming looking for him, he was getting claims, we were his lawyers for free and he was ruining the experience.<br />
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At some point, the biggest company in my town offered me a job as their in-house lawyer, and they set up an entire floor on their building just for me.<br />
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I discussed this with my partner and I felt awful. I left all the money I have put no the project, money down for the lease, furniture, computers, advertising, all the clients and I left feeling really bad and apologizing for my decision. Actually I felt so bad that I never truly forgave myself and always discussed it with my wife.<br />
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What I did was that as soon as I could I called my friend with me and set up shop again, now with my connections and the experience of having been in the "big leagues" in my city (which was not big in comparison to the real world). So I took him with me and I gave him a 50/50 split again, even with the growth being so different in those years. I never totally forgave myself for abandoning him for a better situation. He never questioned it. If he resent me he forgave me way before than I did myself. Now we are dear friends and 50/50 partners on the specific office, but that feeling of failing somebody I would never forget. Besides this relationship I don´t think I would ever partner with a dear friend again. At least not fully on.<br />
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This is way I hate your situation. Someone bailing and trying to get money is awful man. Someone loyal would never do something like that.<br />
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Best of luck!</div>
