You say he contributed nothing to your current product
Actually, I said
A's contribution to our current efforts is zero
It's an important difference and I chose the word carefully. Our early efforts with him did not succeed, but based on my experience it is almost impossible to succeed without making mistakes first and learning from them. We value his contribution, which is why I am trying to determine a fair way to compensate him for this efforts.
Edit: Let me expand on what I said. It is hard to talk about separation while sounding entirely positive, because separation is not a positive event. I wouldn't even have met my other cofounder if it were not for A. So, rest assured, however this separation is structured, in my mind he will have earned his keep.
Good idea but this would require us to wait till we raise funding, and therefore have a valuation. We are wondering if there is a way to resolve this right now so that it doesn't complicate an already complicated fundraising process.
Maximizing equity for the remaining founders (and current and future employees) is the primary objective. Doing so fairly is important also, but to quite a degree, fair is subjective.
Agree that the best thing is to focus on the business and maximize the pie.
Actually, I said "a convertible note for an amount equal to"..which gives him a chance for a payoff at a later date and (as I understand it), provides a floor for this payoff while limiting the ceiling to a certain extent.
However I am not sure if this understanding is correct.