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1 year agoI don’t see anyone else saying it, so I’ll say it: You probably shouldn’t cash whatever check they send you. They are going to argue that it was a check for accord and satisfaction. “What they are comfortable paying you” is not what you agreed to, and you should be wary of accepting a lesser amount without making it absolutely clear that you are still pursuing the full amount.
>Note: we haven’t formed an LLC yet, and in theory I could just tell him that we don’t want to work with him anymore, which we don’t want to do, and we’d like to be fair.
I’m sorry, WHAT? You are in a position of contemplating a multimillion valuation, and you are going completely bare? Son, you already done fucked up.
You are, at this moment, in a general partnership with this dude who is about to hate your guts. Because that’s what happens when you agree to an open-ended venture without registering anything: it defaults to a general partnership.
So now you have to go about fixing it, and here is the approach I suggest: You do not tell this partner you are buying him out or that you don’t want to work with him anymore. You tell him that it is time to formalize the terms of the LLC because it is a necessary step towards growth - which is true. Then you tell him that everyone is going to have to either make capital contributions or make certain work commitments for their share of the company. Since it was his idea, you and the other founder are going to front him 10% as though his idea were a capital contribution, but if he wants more than that, he’s going to have to contract up and commit to some real work.
Then you get a lawyer to formalize that agreement, and you commit yourself before God and man that you will never again go this far into a business venture without a real contract or an incorporated entity.