The point is that the "assumption that they've done significant work on the business" is simply not valid. Before you have a product, all the "significant work

The point is that the "assumption that they've done significant work on the business" is simply not valid. Before you have a product, all the "significant work done on the business" (usually listed as 'doing market research, incorporating, and having an email from an investor that says 'I am interested in talking more when you have a product' which is investor-speak for 'please go away') is just as much of a risk and a liability as software that will inevitably be rewritten. When you launch and all those business assumptions change later on and you need to pivot, rendering null all the business work you did previously, it's not like you would go back to your technical cofounder and say "I was wrong about that market, all the work I previously did is now worthless except for the 'lessons learned' part, so here's the extra 20% I subtracted from your equity originally".