A long friendship has ended, and I am looking for an objective, collective third party opinion on this matter.
Summary: five days before a critical deadline, a collaborator has, with no warning, decided to withold his now critical code and demand 7.5% equity in the company for 7-14 days of non specialist, entry level work.
Background: I have spent almost two years on and off working on a startup idea. I am the sole employee, the company does not actually exist yet. I came across an opportunity to demo a prototype to a potential source of funding. Note, I am not offering equity in exchange for this funding. This will be important later.
I have a (formerly) good friend, we will call bob, who has spent the last year or so self-studying to become an entry level programmer. He has no experience, did not go to college, or finish high school. We have in the past floated the idea of having Bob build a UI for the prototype, as a learning experience and portfolio piece - he has in fact asked for such opportunities from others as well, because he is finding it difficult to break into the software industry with no actual coding experience to show for.
With two weeks to deadline, we reached a friendly agreement that he would build this UI - something which I could have easily done myself. In return he would be able to host the code on his github and reference it in interviews. This freed me up to polish up some other parts of the code prior to the demo.
5 or so days before the deadline, Bob messaged me, claiming that he was not being compensated fairly, and that he would not release the mostly complete UI code unless I gave him 7.5% equity in the company. Bob knows that I have not spent this time working on the UI myself, and that I will now have to scramble to build an alternative on a shortened schedule if I do not concede.
In an attempt at objectivity, I will describe his subsequent justification below:
Bob estimates that he has invested ~70 hours of his time, plus two years worth of study.
Bob claims that this UI and the demo may become IP of my client (absolutely false) and he may not be able to host the code publicly as a portfolio piece.
After a heated exchange, Bob also claims that "there is risk of potential future legal action of intellectual property theft should this code be open sourced", and there is a risk that he may be held liable for damages by other parties because his demo UI "code may be used by a large company to make decisions"
- Is Bob's behavior ethical?
- Assuming these demands weren't made retroactively, is 7.5% equity stake for Bob's skills and one time work a reasonable request?
- Was our initial agreement, compensation in the form of exposure and portfolio material for 7-14 days of work, unreasonable for Bob?
- What should I have done differently, and what can I do in the future to avoid this situation?