I am starting a business with my brother and a third party. I do not trust this third party and we are soon to sign contracts that will give him possibly 25% of the company. He has other business ventures and prospects so I do not know is committment to this. I am afraid we will give him 25% and he will sit around while we do all the work and take his percentage of profits. None of us are putting money in from our own pockets but my brother and I own the patent that is the basis of our product. This third party will pay us back proportionately to the value of the patent with his percentage of profits until it is paid back. His main contribution to the company is his prior experience in starting a business(potentially attractive to investors) and his connections in the business world and investors. I expect him to find investors for the company and/or be the reason investors invested money into our company(because of his credentials and/or his pitch of the company) or I don't think he deserves any more than 5%.
Do you think this is fair? What are some things we can do to protect ourselves from this? Is it common to have a contract specifying duties of the co-founders prior to the business being formed(which we will then hire professionals)?
Thank you for any and all advice. We are in a tough spot now as we almost want him out altogether to avoid this but our team of engineers think he is an asset and might walk if we cut him.