In short, Yes and Yes. Even if you had an equity agreement day one, it's unlikely that it would represent what happened in the business over the last four year

In short, Yes and Yes. Even if you had an equity agreement day one, it's unlikely that it would represent what happened in the business over the last four years. Its always OK to revisit this with you co-founder, otherwise it will eat you alive. It's reasonable to assume the funding was equity investment. It may be more of a case of, four years in, your co-founder wants to get some money back out, and calling it debt is the easy way to do that. I find, as a general rule, when money on is on the table, founders start counting their nickels and dimes and re-visiting their decisions to maximize their benefit. Time is the most valuable asset we have and yet its often undervalued as a contribution to a business. I hope that helps!