I have read numerous posts and articles on this topic and it is clear there are several schools of thought that involve many shades of grey. I have come to a conclusion but am seeking affirmation from people with actual experience in this area as this is my first business venture.
Background: My friend and I started a venture 5 years ago with the notion of being 50/50 partners. We are not a corporation at this point. This started out as more of a hobby that has blossomed to a potential business. The business involves oceanographic data collection which requires instrumentation to collect the data and subsequent data processing and analysis. I personally design, manufacture and assemble the equipment. I write the code for data processing and analysis. I currently work in the industry and have done so for the last 10 years while my friend has about 1-2 years in the industry. I have contributed over 93% of the at-risk capital to date. My contacts have generated our only revenues. We both have 40+ hr/wk jobs, I put on average 20 hrs/wk to the business where my friend puts in on average 1 hr/wk. The only aspect we are 50/50 on is field work which takes two people.
The one question I keep coming back to is how would the business fare if either one of us left? If he left I get a grad student from the local university to help with field work. If I left it would be virtually impossible for him to continue.
So my questions are 1) how would you split up equity, or am I doomed with my friend as a partner? 2) How can you transfer IP into the company for equity?