I'm in a partnership which has trust issues (from my partners side), he had a bad experience prior to our partnership and he isn't being transparent.

One of the most toxic ways early stage companies fail is picking bad co-founders. Building a business is hard, and if you expect to ever make it anywhere worth mentioning, you're going to need help. Anything past a cute business that makes you a couple hundred bucks a month is going to have more work than you think. There is simply too much to do alone. My suggestion: Do your best to find someone you can work with. The best business leaders find ways to bring in diversity of thought. Assemble your team to fill in your gaps. If you think you have none, you're being dishonest with yourself. Take your time with the search. Picking a bad co-founder will take you nowhere fast, like you've seen. Start with Angellist, ask a lot of questions. Good luck!

It really depends on your relationship with this person, which I didn't think you mention. Do you know him and trust him? If you trust him that's fine. The only issue I see is the time zone difference, you'll just have to work it out between the two of you.

I feel your pain — I've been there several times in a couple of my companies. Each situation ended up being unique, and had to be handled differently. I think there are a few things to consider before you make your decision: -- 1. What is in your cofounder's way? Is you cofounder being held up by a lack of clarity? Lack of motivation? Lack of autonomy? One of my past cofounders was very good at getting the job done, but didn't naturally have the skill to lay out tasks in a manageable way. To get around this, I worked with the whole team (4 people) to write up process documentation that removed the need to "figure out what to do next" that was tripping up this cofounder. -- 2. What job was your cofounder brought on to complete? And is it being completed? One of my companies brought on a cofounder simply to give us a marketing platform — he had a huge online audience — but he did nothing else. At first, this caused tension; once we had specifically laid out who was on the team and for what purpose, it was easier to identify where responsibilities lay. -- 3. Is your cofounder capable of doing the job? One of the more painful ordeals I've gone through in business is bringing on a good friend, then realizing that — despite his talent and intelligence — he just wasn't able to perform the job I'd hired him for. His skills were better suited for a different job: he needs hands-on management; he works better with repetitive tasks that don't require big-picture thinking; he lacks assertiveness and confidence, which were critical for the management-level role he'd been hired to do. After I tried to clear everything in his way, it became clear the company couldn't survive if he remained on the team. I had to lay him off. -- 4. Do you just simply not like the way this cofounder works? In one of my startups, there was a cofounder who I didn't know all that well, but he had amazing industry contacts and domain knowledge. However, once we started working together it became clear that we had VERY different working styles. He drove me completely nuts with (what seemed to me to be) a very ADHD-style of planning, with projects starting and being dropped and then coming out of nowhere with a call at 21:00 to discuss something critical that would be forgotten tomorrow. I'm sure I drove him nuts, too. So eventually we ended up selling that company — it was that or shutter it — because we knew there wasn't a chance we'd be successful if we continued as we were. -- Working with other people is tricky in general. Our instinct is to assume that we're the best workers on the planet and everyone else is incompetent, an idiot, a slacker, or all of the above. Usually it's a combination of an organizational-level lack of clarity, poor communication, no processes, and (sometimes) plain ol' we-don't-see-eye-to-eye-on-things-ness. Hopefully that helps. Feel free to get in touch if you'd like to hear specifics on my situations, or if you'd like any help devising a strategy for resolving your cofounder trouble. Good luck!

You should always give someone what they deserve. Never more and never less. Most people don't know how to do this so they guess. They try to predict the future or they look for rules of thumb or they try other ways of guessing. Kind of like you are doing now. The best way to determine this is to consider one person's risk relative to others. When someone contributes to a startup company and doesn't get paid they are accepting risk. The value of that risk is equal to the fair market value of the contribution they made. For instance, if you could earn $100,000 a year doing whatever it is that you do and you do it for a startup without getting paid you are, in effect, risking $100,000 a year. Taking risk in a startup company is essentially betting on the future outcome of the startup. If you and I bet $10 on the same hand of Blackjack we are each betting the same amount and, therefore, each deserve exactly half the winnings (if any). So, the right way to split equity in a startup company is to keep track of what's been contributed, then perform this simple formula: Individual Ownership (%) = Individual Risk/Cumulative Risk The model changes over time as more contributions are made. Each day a person contribute their stake would change. This means that at any given time, no matter what changes, who joins or who leaves. Everyone always has exactly the ownership they deserve to have. Unlike traditional models that require us to predict the future, the relative risk model is based on easily observable values in the market. Everything has a fair market value. So, the answer to your question is simple. Add up the risk he has taken and divided it by all the risk taken by everyone (including you). Each person's share can be calculated this way and the total will always equal 100%. On day one, before he's done anything, his ownership will be 0%. As it should be. Over time, as he risks, his % will change based on relative risk. This is a perfect, unambiguous formula. Every other equity model lays the foundation for disputes later on. Only a relative risk model will give you the fair answer. I've written a book on this topic, called Slicing Pie, you may have a copy if you contact me through Clarity.fm or SlicingPie.com.

From an ethical standpoint I would tell him that he cant wait until you have an exit or sufficient cash flow to buy him out. First he quit. Second, he wasn't performing to expectations, Third, he wasn't there long enough to make much of a difference in the business. You obviously owe him what you told him, but I would not try and perform any superhero feat's to make it happen in the short term. Having said that, if the amount is minimal and you have the cash you may just want to buy him out now, so that you don't have to deal with him in the future.