I am seeking help in how to handle an underperforming partner / friend that is resigning from an early phase of a startup.
Two friends and I began an equal partnership startup with the following roles & responsibilities:
Me: Loan money to company. Partner A: Original idea, networking, marketing, subject matter expert. Partner B: Manage tech decisions & developers.
The agreement was verbal and has not yet been put into writing. Partner B provided a budget which advised a need of between $8,000 and $15,000, plus monthly maintenance. Development costs have now surpassed $20,000 and we don't have a minimum viable product.
Partner B has communicated slowly, caused major delays to the project, and under budgeted. Partner B wishes to resign due to lack of ambition for the project. He feels his time spent so far is worth $10,000, and wishes to be compensated for this. Doing so would increase my stake to 67%. I disagreed with him and refused to give him a counter offer until I conducted more research.
My other tech consultant (who is extremely sharp) analyzed our project today and informed me he could have had the same development done for just $2,000 using his extensive software libraries, or $5,000 if he began from scratch.
Add $1,300 in graphic design and we essentially have $3,300 (low) - $6,300 (high) worth of assets and over $20,000 in liabilities right now. I do not feel that Partner B is owed anything in this situation, but I don't know how to approach this considering that he is a friend that I wish to keep.
Any pointers on how I should approach this? I don't want to alienate and lose a friend, but I am also unwilling to pay him any substantial amount of money for something that could have very well been developed for no more than $6,300.