Is this equity split unfair?

I completely understand and appreciate your point of view, but here are some things you may want to consider (if you haven't already) before you try to negotiate a larger stake.

• Engineers tend to underestimate the value of non-engineers (and vice versa). It sounds like your partner has the vision to drive the product forward, and that's a huge asset. Perhaps he has special domain expertise (which could greatly inform the direction/development of your product -- even if you will be doing the coding), and he may have the knowledge and skills to manage and implement many other aspects of the business (marketing, sales, operations, customer service, etc.). Even well-engineered and useful products don't thrive in the marketplace without all of those other business elements.

• He clearly values your relationship and trusts you. He invited you to participate in the development of a product that -- you agree -- has good market potential and is probably the center of his world right now. He could have "hired" a developer for equity, and the equity would likely have been far less than what he's offering you. (I think even early-stage CTOs might only get 2% - 5%.) If you reject his offer, he could still go find someone else since he's the one with the vision for the product... especially if the product isn't too complex. It sounds like he wants you because of your prior relationship, and for that he's willing to give up more equity than he would have to otherwise.

• Raising capital is no small feat. Depending on the type of site, your target consumers, etc., some amount of financial capital is almost always necessary for a startup's success. It's important for many things, including: A.) Gaining traction and market share relatively quickly. Branding, advertising, sales... these things aren't cheap unless your idea is incredibly unique and therefore worthy of great earned media (a.k.a., news coverage) and viral adaptation. B.) Compensation. Having the cash to compensate employees (including the founders) is important, as it enables your team to be completely devoted to the product and consumer, as opposed to being stressed about personal finances, being forced to moonlight, etc. C.) Product improvement. After your beta site is done and launched, you will presumably start working on new features, improved usability, etc. Maybe you'll need an iPhone app developer, a UX expert, etc. D.) Operations. Office space, equipment, hosting, travel, legal services, accounting, etc. Early-stage capital is not super easy to find; having someone on your team who knows how to bring the right people and dollars to the table is important.

If you really feel like your friend's only contribution to this startup would be the ability to raise money, and he wouldn't assume any of the other responsibilities I mentioned above, you may be right that you deserve a larger stake. However, my guess is that he probably sees his role in broader terms than that, and you should have a good conversation with him to define more clearly your respective roles and responsibilities. Only then will you be able to feel comfortable accepting the equity he has offered or make a solid case for a larger stake.

Just my two cents. Good luck!