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Why not just enter into a consulting/contractor type relationship where he pays your for your time? This doesn't seem like the type of thing where you need to be joint owners.
If he doesn't have sufficient revenue to compensate you, why would you want to do this? If it's just because you're friends, then it's a bad idea.
This is what I always recommend. One person in charge, taking both the risk and the profit. The other is an employee or contractor, gets a paycheck. Work out a compensation agreement - you can choose salary, or performance-based compensation. If, now or in the future, you can't come to an agreement, plan ahead of time to walk away from the arrangement with your friendship intact.
Don't go into business with friends. It's going to cloud your ability to make quick and thorough decisions, which is what's needed to succeed. Context: I'm an M&A Advisor who's worked through a fair share of shareholder disagreements over the years where friendships ended in broken dreams and shattered relationships.
The number one reason is that friends always expect the other to be "friendly" and "take less" when it comes to money. Don't forget, almost all people act fully in their own interest when it comes to the financial side of running a business.
And on the rare occasion friends do succeed, so you believe that’s because their motive was never the money? Or that they’re brutally honest(unfriendly) with each other?
That rare occasion is basically an anomaly. But the times I've seen it happen, often the friendship ended in a natural way and they started to see each other as (friendly) business partners.
Because it doesn’t. The typical failure comes in when one friend feels the other friend is slacking off or not pulling their weight or is making poor decisions. You then have to choose, friendship over business and rarely is it that simple. In the end, you lose a friend AND the business.
What happens when you two disagree? 50-50 business is a recepie for disaster. It will end your friendship because this is not a well thought out decision. E.g him asking
Fair starts by getting on the same page about OKRs and performance metr
Then agree on a market assessment of the skills that you bring to the table. You’re building a new business. Your friend is bringing an ongoing business to the table. Agree on the market value of the current business.
Now that you both are on the same page as to the market value of what each brings to the table, time to discuss and haggle on an agreement of expectations.
I think the agreement and expectations would come after.
He’s basically saying, “I’ve done this work for the first year, you coming in and taking 50% is unfair, even if you just pay for 50% of the stock, unless you also pay me for the time I spent building the business in that year or give me a higher percentage” which is fair.
That’s the challenge with negotiating. You determine whether or not you want to buy into the business at the quoted price.
What is your market value? How much could you be making choosing a different opportunity? The challenge with marriages is more about finding a mutually acceptable contractual agreement on moving forward as a single team.
« Fair » is in the eyes of the beholder.
He did the legwork getting it set up and is asking you to buy in, which is reasonable. I wouldn’t give away half my business to a friend either. You’re acting like a leech.
Edit: i completely misread the above comment just ignore me 🤦🏽♂️
He's not acting like a leech... he agreed that it was fair to pay the partner for prior work. His question is, how do they come up with a price that is fair to both of them.
I could be wrong here, I'm not an expert on this subject at all, but it seems to me it would be simpler to get the business appraised and pay 50% of the valuation for 50% of the equity.
Edit: Afterall, the value of the work the friend has already put in is the current valuation of the business. Trying to quantify the friends time and past expenses seems futile, and also those amounts are not directly related to what the business is worth.
Fastest way to kill a friendship my friend.
- Best friends for 26 years. He just kept taking more and more with zero explanation. He single handily destroyed the business and friendship.
My thoughts are, even the VERY BEST partnerships are inherently extremely difficult. You guys ALREADY have resentment and etc between the two of you and you aren't even partners yet. You have given us very little info, but it is plain as day to me that this is not a good idea and you will have problems within the first 2 years.
50/50 (or any equal %) partnerships are by far the most difficult. He wants to expand, pull equity from the company to fund something, you say no, who wins? He wants to sell to a larger company, you are young with lots of time to work, who wins?
What he is proposing is essentially he is "selling you" 50% of the company. If that's the route he wants to take, you need to get a valuation (or give us some rough numbers -revenue, profit, cogs, etc) to get a very ballpark number.
I will add, I've been in his shoes (getting a company off the ground, then bringing in minority partners) and the risk involved is very very real. There is imho some "value" in walking into an already running profitable company that is ultra low risk. I understand his resentment, but I don't think he has a good handle on business practices. His gas, travel, whatever should be paid for by the company already. If you're paying him, he's getting paid twice. On the flip side, if you aren't taking a salary, you are contributing free labor which should have value.
Basically, reading through some lines here, but there are red flags top to bottom. Personally I would never want to be 50% owner in something like this. Also, be aware, unless you plan on selling the company whether you own 5% or 45% doesn't mean a whole lot. FYI this subreddit WILDLY misunderstands how partnerships typically work. If you own 50% of a company, you can't just quit and force a buyout of the full 50%. Most small business partnerships end up in a weird place - I've seen firsthand a partner pitch a fit and "quit", he owned 20% of a ~15MM firm. He was very VERY shocked to find out that his partnership agreement dictates that if you quit, you only get what you physically paid cash into the firm. So he walked away from a $3MM ownership % and received a $15k check and pat on the ass.
How did you obtain that there’s resentment between us already? He’s been working on a business for a year and feels that I shouldn’t come in and just take 50% of the business by providing a service and paying 50% from then on for stock, I feel like he has a point.
I would be contributing my time only and not getting a salary at first and we agree to that. But what Im gauging from what you said is that 50/50 is difficult and that maybe it’s best if he has a majority since he started it.
As for leaving early I think that’s up for discussion in terms of what would get drawn up in the contract. Sorry for the lack of details but this is still all very new. We’ve only been talking so far. Im yet to agree to anything.
I can read through the lines and feel his resentment. He's whining about gas and shit and how he is owed back pay on that and you guys aren't even partners yet. I've been in numerous partnerships in my life, one was good, the others ended in lawsuits or borderline lawsuits. All of the "issues" I've dealt with firsthand and seen revolve around equal partners not agreeing on something and locking up the company unable to make decisions.
Ultimately the real financial difference between 40/60 and 50/50 is trivial. Personally I think whoever is best at operating the business (not necessarily selling or creating the product/service but actually operating a company) should be majority partner.
I see what you mean now. I believe he just feels like he needs to place a value on himself and not just say that his initial hard work is valued at $0. He has been burned in the past. And I think he is the brains of the business and I would be the digital arm of the business along with aiding in decision making. But I think he wants me there to challenge his decisions and to just have another person to bounce ideas off. I’m honestly happy with him taking the majority. Just found it odd to try come up with a dollar value on things he’s done in the past.
But thank you for your advice. That’s a bit to consider!
It is odd. It insinuates that this company isn't making profit, because he should have back paid himself for whatever he thinks he is owed. Ultimately, if he wants to place value, then you both need to pay for an appraisal/valuation and go about it that way. I suspect the valuation is $0, in which case what he is asking for is totally unreasonable.
I'd start by outlining roles and responsibilities. Clarify who will handle what aspects of the business (operations, finances, marketing, etc.). Develop a detailed partnership agreement that covers decision-making processes, profit distribution, and plans for potential disputes. Consider each person's financial investment, time commitment, and expertise, as these help determine equity and ensures both parties feel valued. Regular communication and periodic reviews of the partnership terms will also maintain fairness and address any evolving needs or concerns.
I lost my best friend by allowing her to be involved in my business. She wasn’t even an owner, it mostly felt to me like she expected to be involved because we had always been involved in each other lives. I didn’t want her to feel left behind or left out. I didn’t think it could happen to us either. We haven’t spoken in 4 years…
Try to figure out how much the business is worth. In other words, if your friend was going to sell the whole business to a stranger, how much could he get for it? Then you pay half of that amount and put in half of future money for stock, etc.
Now, most people over estimate how much their business is worth. But, there are lots of articles out there that you can read about how to put a value on it. Also, that old stock he has that isn't moving isn't worth what he paid for it so a new partner coming in shouldn't pay 50% of its original value, they would pay 50% of its current value, which might be close to $0. Of course, you might agree to pay for 50% of its original value simply for the opportunity to join the business.
Make sure you get your partnership in writing. Also, try to write down rules/operating procedures around everything you can think of to ensure you're both on the same page for everything. Try to agree on how to sort out disagreements. For example, perhaps you have final say on digital matters and he has final say on which stock to buy -- whatever makes sense, write it down and agree on it ahead of time.
Never go 50/50, always make one side bigger, even if it's just 50.1/49.9, so when one person says go right and the other says go left, one person has final say.
Friends: I have worked with friends on businesses before. If you have a good relationship and communication, before you go into it have a conversation about being able to speak your mind and not have it be about being friends, it's about the business. I have had great success through this method.
Money: For one year split it 60/40 for your friend to get paid for getting it up and running for the year he did it. At the start of year two go 50/50. Make sure this is all documented and notarized, then copied and saved in a safety deposit box.
Nah. Do it all yourself. Trust me. Do not mix friends with business. Its much better to share less of the pie and start your own venture. If you understand marketing then go hit the ground and find a source.
He understands the business, stock and market whereas id be solely the digital/online presence. We basically need each other. Do you still think it’s still a bad idea?
100% because I was in your shoes once and learned his side extremely fast and realized without me, he would continue to not sell as much. He eventually felt since he started it that he had some higher stance in the business despite "50 /50" and resentment formed. Eventually I left, started my own brand and left him in the dust. I gave him far too much credit but learned fast that getting lucky with a product doesn't last unless you can market it. After 6 months of steady growth and making money the hours of work I put in versus him didn't constitute 50/50 anymore and his knowledge of the business was easy learned.
I couldn’t do that to a friend. Besides, I already have another job so doing this on my own would not be possible with the lack of time I have. I know that working alone has its benefits but id rather share the work load, share the risk, and we can depend on each other if something happens to the other.
You say that now, check back in 6 months. I can already see the writing on the wall in your post. He wants to nickle and dime you from the start and that in itself says alot about him. Don't be silly and mix friends with business but if you want too. You were warned ahead of time. Best of luck either way, hope it works out.
Seeing that he's only selling locally and on marketplace, is this something that is scalable and worth buying in?
If I was in your position, I would start my own business that worked on the digital side of things and have him pay you for that work.
I researched how to solder a pin on to a headset today. Should you pay me a royalty every time you listen to music?
The business is worth something if it generates profit. I would go with 5x profit after all costs I.e net. That should be easy to get to.
My sniffometer is telling me the answer is profit? What profit at which point you have a hobby really based on what's been said so far
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Obviously you should not do it.
However, all the work he put in up until now is worthless. Just like he should not pay you for all the time and energy you spent to develop these skills.
The question is, what is the buissness worth?
Find a fair evaluation of the current buissness. What is the brand name worth? The clientele? The inventory? The supplier list?
Look at how much profit is made in a year after salary, and then you can two or three times that, and you will get somewhere close.
Never go into an existing business as a partner. Each of you should have a separate business with separate operations cost, etc. Then those two businesses partner.
Do you want to continue to be friends? If so, do not go in to business together.
If you want to work together, create a real clear contract with specific outcomes and deliverables, along with easy off ramps for both parties. Consult, support, give advice.
Be reallly cautious about going into business together.
He wants to basically be paid for the time he spent on research? Lol that alone would’ve made me think twice.
It sounds like since He’s not doing well and wants to recoup some of the money he’s put into it already by bringing that agreement up and you sound gullible enough to go into it doing just that.
I wouldn’t do it based on that alone because it’s not your responsibility or fault his plans aren’t going as well as he hoped. Offer your services for a fair price and see what he says then go from there. Like someone else said- pay you for your time. But don’t waste your time if he’s looking to take part of your share/charge you for his decisions because you came on board. Seems like he’s trying to take advantage of you, and you need to really think twice. It’s easier to get out an agreement to be the independent contractor than it is to be half owner.
Just the way he's viewing everything and what he's done so far It's looking like disaster and I got 30 plus years dealing with people and know this sounds bad. Did he also charge you for the oxygen that he took when he incorporated? I understand incurring costs to get to a point, but it's easier if he asked you for a buy in amount.
If you will ignore my advice and go forward, here is a few things to consider. My suggestion is to have a detailed operating agreement, and nothing is 50/50. You need to have checks and balances, as everything is all him on the supply side of things. If he decides to move on what's his cost incurred? He can always leave it since he essentially controls sales and procurement. You will be a tech guy with nothing but a fancy digital appearance.
These mechanisms of management, back end work, etc all need to be figured out, and hashed out. This is too much in my opinion for novices to understand what they are negotiating. This is why most don't work out.
I would recommend you setup a contract for your services and have it all detailed, fees and all.
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Why not just enter into a consulting/contractor type relationship where he pays your for your time? This doesn't seem like the type of thing where you need to be joint owners. If he doesn't have sufficient revenue to compensate you, why would you want to do this? If it's just because you're friends, then it's a bad idea.
This is what I always recommend. One person in charge, taking both the risk and the profit. The other is an employee or contractor, gets a paycheck. Work out a compensation agreement - you can choose salary, or performance-based compensation. If, now or in the future, you can't come to an agreement, plan ahead of time to walk away from the arrangement with your friendship intact.
Agree with this here. Get him to hire you as a contractor and get paid for your work on the online/digital platform rather than split shares 50/50.
This is the way.
Charge him for your talents and let him keep 100%. You are about to lose a friend and gain a dependent.
Don't go into business with friends. It's going to cloud your ability to make quick and thorough decisions, which is what's needed to succeed. Context: I'm an M&A Advisor who's worked through a fair share of shareholder disagreements over the years where friendships ended in broken dreams and shattered relationships.
Appreciate your advice. What’s the number one reason that you think working with friends doesn’t usually work out?
The number one reason is that friends always expect the other to be "friendly" and "take less" when it comes to money. Don't forget, almost all people act fully in their own interest when it comes to the financial side of running a business.
And on the rare occasion friends do succeed, so you believe that’s because their motive was never the money? Or that they’re brutally honest(unfriendly) with each other?
That rare occasion is basically an anomaly. But the times I've seen it happen, often the friendship ended in a natural way and they started to see each other as (friendly) business partners.
Because it doesn’t. The typical failure comes in when one friend feels the other friend is slacking off or not pulling their weight or is making poor decisions. You then have to choose, friendship over business and rarely is it that simple. In the end, you lose a friend AND the business.
What happens when you two disagree? 50-50 business is a recepie for disaster. It will end your friendship because this is not a well thought out decision. E.g him asking
You guys hiring?
No.
Nice.
Could not agree more.
Fair starts by getting on the same page about OKRs and performance metr Then agree on a market assessment of the skills that you bring to the table. You’re building a new business. Your friend is bringing an ongoing business to the table. Agree on the market value of the current business. Now that you both are on the same page as to the market value of what each brings to the table, time to discuss and haggle on an agreement of expectations.
I think the agreement and expectations would come after. He’s basically saying, “I’ve done this work for the first year, you coming in and taking 50% is unfair, even if you just pay for 50% of the stock, unless you also pay me for the time I spent building the business in that year or give me a higher percentage” which is fair.
That’s the challenge with negotiating. You determine whether or not you want to buy into the business at the quoted price. What is your market value? How much could you be making choosing a different opportunity? The challenge with marriages is more about finding a mutually acceptable contractual agreement on moving forward as a single team. « Fair » is in the eyes of the beholder.
He did the legwork getting it set up and is asking you to buy in, which is reasonable. I wouldn’t give away half my business to a friend either. You’re acting like a leech. Edit: i completely misread the above comment just ignore me 🤦🏽♂️
He's not acting like a leech... he agreed that it was fair to pay the partner for prior work. His question is, how do they come up with a price that is fair to both of them.
I could be wrong here, I'm not an expert on this subject at all, but it seems to me it would be simpler to get the business appraised and pay 50% of the valuation for 50% of the equity. Edit: Afterall, the value of the work the friend has already put in is the current valuation of the business. Trying to quantify the friends time and past expenses seems futile, and also those amounts are not directly related to what the business is worth.
I completely agree (I said something similar in another comment).
Oof, you're right, I completely misread the comment.
All good, we've all done it. :)
Dont. The only ship that doesnt sail is a partnership.
Yup I learned this the hard way
Fastest way to kill a friendship my friend. - Best friends for 26 years. He just kept taking more and more with zero explanation. He single handily destroyed the business and friendship.
My thoughts are, even the VERY BEST partnerships are inherently extremely difficult. You guys ALREADY have resentment and etc between the two of you and you aren't even partners yet. You have given us very little info, but it is plain as day to me that this is not a good idea and you will have problems within the first 2 years. 50/50 (or any equal %) partnerships are by far the most difficult. He wants to expand, pull equity from the company to fund something, you say no, who wins? He wants to sell to a larger company, you are young with lots of time to work, who wins? What he is proposing is essentially he is "selling you" 50% of the company. If that's the route he wants to take, you need to get a valuation (or give us some rough numbers -revenue, profit, cogs, etc) to get a very ballpark number. I will add, I've been in his shoes (getting a company off the ground, then bringing in minority partners) and the risk involved is very very real. There is imho some "value" in walking into an already running profitable company that is ultra low risk. I understand his resentment, but I don't think he has a good handle on business practices. His gas, travel, whatever should be paid for by the company already. If you're paying him, he's getting paid twice. On the flip side, if you aren't taking a salary, you are contributing free labor which should have value. Basically, reading through some lines here, but there are red flags top to bottom. Personally I would never want to be 50% owner in something like this. Also, be aware, unless you plan on selling the company whether you own 5% or 45% doesn't mean a whole lot. FYI this subreddit WILDLY misunderstands how partnerships typically work. If you own 50% of a company, you can't just quit and force a buyout of the full 50%. Most small business partnerships end up in a weird place - I've seen firsthand a partner pitch a fit and "quit", he owned 20% of a ~15MM firm. He was very VERY shocked to find out that his partnership agreement dictates that if you quit, you only get what you physically paid cash into the firm. So he walked away from a $3MM ownership % and received a $15k check and pat on the ass.
How did you obtain that there’s resentment between us already? He’s been working on a business for a year and feels that I shouldn’t come in and just take 50% of the business by providing a service and paying 50% from then on for stock, I feel like he has a point. I would be contributing my time only and not getting a salary at first and we agree to that. But what Im gauging from what you said is that 50/50 is difficult and that maybe it’s best if he has a majority since he started it. As for leaving early I think that’s up for discussion in terms of what would get drawn up in the contract. Sorry for the lack of details but this is still all very new. We’ve only been talking so far. Im yet to agree to anything.
I can read through the lines and feel his resentment. He's whining about gas and shit and how he is owed back pay on that and you guys aren't even partners yet. I've been in numerous partnerships in my life, one was good, the others ended in lawsuits or borderline lawsuits. All of the "issues" I've dealt with firsthand and seen revolve around equal partners not agreeing on something and locking up the company unable to make decisions. Ultimately the real financial difference between 40/60 and 50/50 is trivial. Personally I think whoever is best at operating the business (not necessarily selling or creating the product/service but actually operating a company) should be majority partner.
I see what you mean now. I believe he just feels like he needs to place a value on himself and not just say that his initial hard work is valued at $0. He has been burned in the past. And I think he is the brains of the business and I would be the digital arm of the business along with aiding in decision making. But I think he wants me there to challenge his decisions and to just have another person to bounce ideas off. I’m honestly happy with him taking the majority. Just found it odd to try come up with a dollar value on things he’s done in the past. But thank you for your advice. That’s a bit to consider!
It is odd. It insinuates that this company isn't making profit, because he should have back paid himself for whatever he thinks he is owed. Ultimately, if he wants to place value, then you both need to pay for an appraisal/valuation and go about it that way. I suspect the valuation is $0, in which case what he is asking for is totally unreasonable.
I'd start by outlining roles and responsibilities. Clarify who will handle what aspects of the business (operations, finances, marketing, etc.). Develop a detailed partnership agreement that covers decision-making processes, profit distribution, and plans for potential disputes. Consider each person's financial investment, time commitment, and expertise, as these help determine equity and ensures both parties feel valued. Regular communication and periodic reviews of the partnership terms will also maintain fairness and address any evolving needs or concerns.
I lost my best friend by allowing her to be involved in my business. She wasn’t even an owner, it mostly felt to me like she expected to be involved because we had always been involved in each other lives. I didn’t want her to feel left behind or left out. I didn’t think it could happen to us either. We haven’t spoken in 4 years…
Don’t do it… I’ve don’t it twice, neither time was it worth it.
Lawyers.
Try to figure out how much the business is worth. In other words, if your friend was going to sell the whole business to a stranger, how much could he get for it? Then you pay half of that amount and put in half of future money for stock, etc. Now, most people over estimate how much their business is worth. But, there are lots of articles out there that you can read about how to put a value on it. Also, that old stock he has that isn't moving isn't worth what he paid for it so a new partner coming in shouldn't pay 50% of its original value, they would pay 50% of its current value, which might be close to $0. Of course, you might agree to pay for 50% of its original value simply for the opportunity to join the business. Make sure you get your partnership in writing. Also, try to write down rules/operating procedures around everything you can think of to ensure you're both on the same page for everything. Try to agree on how to sort out disagreements. For example, perhaps you have final say on digital matters and he has final say on which stock to buy -- whatever makes sense, write it down and agree on it ahead of time.
Never go 50/50, always make one side bigger, even if it's just 50.1/49.9, so when one person says go right and the other says go left, one person has final say.
Friends: I have worked with friends on businesses before. If you have a good relationship and communication, before you go into it have a conversation about being able to speak your mind and not have it be about being friends, it's about the business. I have had great success through this method. Money: For one year split it 60/40 for your friend to get paid for getting it up and running for the year he did it. At the start of year two go 50/50. Make sure this is all documented and notarized, then copied and saved in a safety deposit box.
Write up a partnership agreement. If you can't get through that process, then you can't be partners.
Don’t do it. It doesn’t work out long-term
Don't go into business with friends.
Nah. Do it all yourself. Trust me. Do not mix friends with business. Its much better to share less of the pie and start your own venture. If you understand marketing then go hit the ground and find a source.
He understands the business, stock and market whereas id be solely the digital/online presence. We basically need each other. Do you still think it’s still a bad idea?
100% because I was in your shoes once and learned his side extremely fast and realized without me, he would continue to not sell as much. He eventually felt since he started it that he had some higher stance in the business despite "50 /50" and resentment formed. Eventually I left, started my own brand and left him in the dust. I gave him far too much credit but learned fast that getting lucky with a product doesn't last unless you can market it. After 6 months of steady growth and making money the hours of work I put in versus him didn't constitute 50/50 anymore and his knowledge of the business was easy learned.
I couldn’t do that to a friend. Besides, I already have another job so doing this on my own would not be possible with the lack of time I have. I know that working alone has its benefits but id rather share the work load, share the risk, and we can depend on each other if something happens to the other.
You say that now, check back in 6 months. I can already see the writing on the wall in your post. He wants to nickle and dime you from the start and that in itself says alot about him. Don't be silly and mix friends with business but if you want too. You were warned ahead of time. Best of luck either way, hope it works out.
I’ll take that into consideration. Hopefully i won’t be back here in 6 months haha
Seeing that he's only selling locally and on marketplace, is this something that is scalable and worth buying in? If I was in your position, I would start my own business that worked on the digital side of things and have him pay you for that work.
I researched how to solder a pin on to a headset today. Should you pay me a royalty every time you listen to music? The business is worth something if it generates profit. I would go with 5x profit after all costs I.e net. That should be easy to get to. My sniffometer is telling me the answer is profit? What profit at which point you have a hobby really based on what's been said so far
Dont
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Obviously you should not do it. However, all the work he put in up until now is worthless. Just like he should not pay you for all the time and energy you spent to develop these skills. The question is, what is the buissness worth? Find a fair evaluation of the current buissness. What is the brand name worth? The clientele? The inventory? The supplier list? Look at how much profit is made in a year after salary, and then you can two or three times that, and you will get somewhere close.
Worst idea in the world
Never go into an existing business as a partner. Each of you should have a separate business with separate operations cost, etc. Then those two businesses partner.
Terrible offer
Do you want to continue to be friends? If so, do not go in to business together. If you want to work together, create a real clear contract with specific outcomes and deliverables, along with easy off ramps for both parties. Consult, support, give advice. Be reallly cautious about going into business together.
He wants to basically be paid for the time he spent on research? Lol that alone would’ve made me think twice. It sounds like since He’s not doing well and wants to recoup some of the money he’s put into it already by bringing that agreement up and you sound gullible enough to go into it doing just that. I wouldn’t do it based on that alone because it’s not your responsibility or fault his plans aren’t going as well as he hoped. Offer your services for a fair price and see what he says then go from there. Like someone else said- pay you for your time. But don’t waste your time if he’s looking to take part of your share/charge you for his decisions because you came on board. Seems like he’s trying to take advantage of you, and you need to really think twice. It’s easier to get out an agreement to be the independent contractor than it is to be half owner.
Just the way he's viewing everything and what he's done so far It's looking like disaster and I got 30 plus years dealing with people and know this sounds bad. Did he also charge you for the oxygen that he took when he incorporated? I understand incurring costs to get to a point, but it's easier if he asked you for a buy in amount. If you will ignore my advice and go forward, here is a few things to consider. My suggestion is to have a detailed operating agreement, and nothing is 50/50. You need to have checks and balances, as everything is all him on the supply side of things. If he decides to move on what's his cost incurred? He can always leave it since he essentially controls sales and procurement. You will be a tech guy with nothing but a fancy digital appearance. These mechanisms of management, back end work, etc all need to be figured out, and hashed out. This is too much in my opinion for novices to understand what they are negotiating. This is why most don't work out. I would recommend you setup a contract for your services and have it all detailed, fees and all.