The best way for you to come out ahead is to build the software yourself (you retain the IP) and license the software to your friend. You should work out a lic

The best way for you to come out ahead is to build the software yourself (you retain the IP) and license the software to your friend. You should work out a licensing agreement based on revenue (kinda like the app store, Apple always gets 30%, etc) for a period of time, I'm thinking about 3 years. After that point, you can renegotiate a new subscription. Should the company become really successful, they'll either continue paying you or hire another firm to rebuild the software. Since you're licensing the software, they would no longer be able to use it after expiration, and likely won't have time to rebuild on the fly without impacting revenue. Just having a 'profit sharing' or even 'revenue' sharing agreement won't be enough. The internet is replete with accounts of founders shuttering one business and opening up a new 'business' with all the same property and none of the liabilities. While it might not be legal, it will be a very difficult battle for you to win, especially if the other party has better cash flow. Just be careful not to run afoul of the GPL or other copy-left licenses if you distribute the software to your friend's company. If you are able to host it for them (eg, you are providing a SaaS type offering), this would be even better, unless of course you're doing something illegal, in which case I'd recommend not having any part in it.