I need some advice because I'm not sure if I'm being unreasonable here.
TLDR: Joined friends startup (about 5-6 months in) on 6 month contract for salary and no equity. Built entire project from scratch. I am the only one working on it full-time and want to ask for co-ownership at 20%. Am I being unreasonable?
A long time friend and his best friend started a company 10 months ago.
They were both taking an entrepreneurship masters class and part of the program required they start a business. They got funding to hire someone to help them out with the idea. The funding was 20k (CAD) for 6 months (About 20/hr normal shifts). I decided to accept the position with no equity for 6 months and we'd see how things would go from there. The pay was significantly below what I'd accept anywhere else (60k) but no risk no reward right.
By the time I joined, they were working on 1 side project for the school and I was suppose to work with the friend on the main project. Over the past 5 months, I built 95% of the entire thing. Worked on it 6-7 days a week and meet with them on Sundays to work on it at one of their houses. They both work full time somewhere else and I work full time on this.
So over this time, I focused on my project, his friend focused on the scheduling project one and my mate work the customer relationships and getting clients. Now my contract is coming to an end Dec 8th.
They've offered me another contract of 6 months at 25k with 5% equity. They couldn't get money from the same fund as last time so this time it's coming from the money they made from selling to the school. It's basically all they have so I can't negotiate for more cash and I can live with the cash offered so I don't care about that.
They both currently have full-time jobs a year each so if this doesn't work out, they're covered. I feel pretty stupid putting my career on hold for a startup where I have only 5% ownership, am getting paid less than market rate to be the primary developer/designer/etc, and receive no benefits other than working from home.
I had dinner with the friend (the mutual one) last weekend. He felt we needed to talk because he could sense something was on my mind. He asked me where I saw myself in a few years and I said I want to me making decisions with them at the top. I'm not interested in just being another employee, if that's what I wanted I could do that anywhere else for a salary reflecting my skills and the work I put in. His response was "We're not really looking for another co-founder", I asked him what he was concerned with and for him, he just wants to be making all the decisions without having to justify himself.
Anyways, that's the situation. Just need to know what I should do. I'm going to work on my resume after this. My contract is done beginning of December so I should be prepared anyways. I've never really interacted with startups before and don't really know what my options are. I guess I'm just looking for feedback. I know that I want is a percentage of the company that reflects what I've put into it. My ideal number is 20%. They both currently have %50 each and given the work and risks I've taken to be involved, I don't think I'm being unreasonable. I think an even split between the 3 of us isn't entirely fair since it was their idea, they did the leg work to get the company started and the initial funding, they've currently paid for the lawyer fees (or will at some point) and any other fees so I do get that. But in my opinion I got in early enough and did enough of the leg work that 20% is a fair ask. I'd just love to here some opinions or options.
Both of them received a 9k scholarship from the course where this all started so they put that 18k towards starting the business.
The project the other guy is working on, they sold that to the university for 30K.
They don't know how much they owe their lawyers yet. They're guessing that's going to be around 5-10k
We're not at seeding stage, the product hasn't launched yet, I don't think they've talked to any investors yet so there's no guarantee of any future revenue at this time.
Update: They weren't willing to negotiate and I thought the offer was too low. So even if I had accepted, it would have just fostered resentment. So looks like I just need to find something else to do now.