It all depends on what's on paper and what's been agreed to thus far. Assuming nothing's on paper, here's what I would do: Set up a corporation (yes, get that

It all depends on what's on paper and what's been agreed to thus far. Assuming nothing's on paper, here's what I would do: Set up a corporation (yes, get that lawyer), allocate something to the cofounder (even 50%), but make the total number of shares small, and keep voting rights enough to dilute out the cofounder by issuing additional shares no matter how they vote. Add in for yourself and other hangers-on additional equity based on time worked from this point forward, with industry-standard vesting. You can also fold in an acquisition: Start new company, all the old company's assets are valued at X and you proportionally issue Y nonvoting shares in the new company to all the old shareholders (where Y is a small percentage of the total). Cofounder must either sign off or be outvoted at old company, or else you're stuck. Crackpots always think that their work begins and ends before a product gets traction (even many prodigious successful businesspeople lean this way until they learn by succeeding) when the truth of the matter is that the work is much more back-loaded than it seems. If you hired a general contractor to build a house, and he left it 50% done, lots of times you'd have to pay more to get it completed than if you'd never hired him at all. This is the wicket your cofounder has left you in by leaving when things are just getting interesting.