I've been in a similar situation before. I joined a startup that had limped along for years just as it was launching a new product. I slowly realized that thi

I've been in a similar situation before. I joined a startup that had limped along for years just as it was launching a new product. I slowly realized that this new product was the company. Everything else was water under the bridge. However, the company (and certainly its investors) didn't see it that way. They'd invested a lot of time and money. To them, the idea that I would have as much stock as someone who had been there for 7 years seemed unfair. The company badly needed new funding, and it all fell apart for this very reason. Someone offered to put in a lot of dough. The existing investors and stockholders figured, ok, you're offering about 10% of what we've put into this company, so you get 10%. Okay, 15%. The investor figured, no, that's all water under the bridge. The money I invest now is almost a brand new investment. I need way more than that. They couldn't reach a deal and the startup folded. You may be in a similar spot. Your buddy, and all his employees, figure they've been at it for 5 years. But does that 5 years have any meaning, or is it just dead weight? You did say that they have "significant traffic", so maybe there is a lot of value already there, and you'll be building on top of something already successful. Or maybe there's nothing, and you're essentially starting a new company but with all the baggage of a failed company. Hard to say, but this is what it all turns on, as far as I can see.