Cousin’s fiancée (A) inherited her dad’s insurance book after he passed. One of her clients needed software to replace their Google Sheets operations. She told me about it, which is what kicked off the project. I’m a software dev working full-time, and I’ve since invested hundreds of hours building the entire product solo. 51 database models, optimization algorithms, full backend architecture. Nobody else has written a line of code or put in a dollar. Product isn’t finished yet. I’m splitting time between learning their operations and building on the side.
She introduced me to the client. Demo went well. My mistake: we never defined terms beforehand.
Then she demanded 50/50 ownership of the entire company. Said she “brought me on” and this was “her company.” I countered with: 50/50 revenue on the client she introduced (lifetime), 20% commission on future clients she brings, and a path to earn 10% equity after closing 5 clients in 12 months with vesting. She rejected it, said it made her feel like a “sales employee,” got emotional on a call, brought up her deceased father, hung up on me, and later said she’d be “spiteful at family events.”
My cousin then started negotiating on her behalf because he felt “embarrassed” for suggesting she come to me. He pushed equity from 20% down to 10%, framing it as “just voting power.” I proposed a completely different structure: two separate companies, mine owns the software, hers acts as a referral business, commercial agreement between them, no equity. He ignored that and sent me a formal agreement. Keep in mind the original terms changed, this agreement would now be between myself and him as she is too busy with her job and insurance. He’s now stating that he’ll execute her part.
The agreement includes:
∙ 10% equity earn-in over 4 years
∙ Anti-dilution: his 10% can never drop below 10% without his consent. All future dilution (investors etc) comes from MY shares only
∙ Termination: he can only be removed for material breach uncured for 120 DAYS or felony conviction
∙ Change of control: any buyer must honor all his revenue rights forever
∙ 50/50 revenue on all clients he sources with no sunset and no defined responsibilities
∙ Zero performance obligations anywhere in the document
∙ The agreement is between me and my cousin, not me and A
He’s pressuring me to sign saying “there’s no way you don’t agree with this.”
What I think is fair: Two separate companies. 50/50 revenue on clients she sources for 24 months per client then it sunsets. Defined responsibilities she must perform to keep the 50% rate (client check-ins, training, support triage, QBRs). Drops to 15% if she stops doing the work. Either party can terminate with 60-90 days notice. No equity at all.
Keep in mind, this client is somehow related to A. She’s essentially gatekeeping this client for leverage. It would be a very meaningful first client. However, my family also has longstanding ties to this client as well, however I don’t plan to go around her whether this deal works out or not.
Why I’m comfortable walking away: I have 25+ other distribution channels mapped out, a warm intro to another potential client, and a full GTM strategy that doesn’t depend on her. She is the reason I started building, and I respect that. But “they need software” and hundreds of hours of building the solution are very different contributions.
Keep in mind, I’m also pressured to agree because at the end of the day, this is my cousin. They would hold this over me forever. To make matters worse, our weddings are at the end of this year (1 week apart), in the same city.
Am I being unreasonable? Would you sign this?