Question: How do I deal with a co-founder who came up with the idea, asked me to partner with him, and now hasn't done anything since we agreed on going into business together.
Background: My friend and I met through our fraternity while in our respective universities. We've been relatively close, and always had a desire to start our own business someday (the startup bug). The idea for the company we are working on right now was his, and he asked me to join him since he felt I would be the best person to work on it. I agreed initially to a 40/60 share (since he developed the idea).
He approached the idea to me in May 2011, right around the time when I was graduating from college. After that, all of June the only thing he did was join me on one meeting with an advisor where he didn't really interact at all. In July he went back to his college for summer school, but we decided we would keep working with each other remotely.
Neither one of us has any experience whatsoever of starting or even running a business, but I expected him to learn about it with me. Since we started, he has done absolutely nothing except talk to me on the phone once a month about what we should be doing (very basic information). Since June, I have:
Consulted with various mentors/advisors/Executives/CEOs in the industry we're targetting to get feedback on the product and gain insight about how to launch it.
Hired a developer to produce Version 1.0 of our product (albeit very basic) and provided him with all the sketches, flow-charts, info about what we were looking for. I have been asking my co-founder to contact him since I brought the programmer onto the project - three months and still nothing.
Conducted "market research" with relatives, friends, professionals who are involved with the industry, pitched the idea and gained feedback about what they would like to see in the product, how much they would be willing to pay, etc.
Talked to vendors who we would like to partner with in order to get our product to consumers.
Until last month, I was generally understanding of his situation that he was busy with classes and that he really couldn't put too much time into the project. However, I did not expect him to put 0-hours in it after 3 months.
I was wondering if there are other people on this forum who have had similar situations, and how they dealt with them? Some people have told me to drop him altogether because we haven't signed any contracts or registered the company. Personally, I don't want to "screw" him over, but at the same time I know he's holding me back by not being involved at all. I spoke to him about my concerns a month ago, after which he assured me he would be able to spend more time working after the beginning of September. No contact since. However, I scored a small personal victory by renegotiating to 50/50 (although I still don't think that's fair).
Should I create a co-founder vesting agreement? Where can I find templates? Should I drop him altogether? Are there any legal implications? Should I renegotiate for a higher percentage share?
Thank you for reading!