I am not experienced in these matters, but my intuition is that an IOU as you described isn't really fair in all situations. As an extreme example, if you inven

I am not experienced in these matters, but my intuition is that an IOU as you described isn't really fair in all situations. As an extreme example, if you invented and quickly prototyped a genuinely new technology that no one else knew about, then I would say your contribution is much more than whatever it cost you to make the prototype. It's commonly asserted that ideas are worth next to nothing, the difficulty is all in the execution, etc. I don't think that's entirely true. If your idea is just a vague one-liner like "facebook for pets", then sure, it's not worth much. But as you start building out a prototype, you're forced to be more specific and refine the idea, and it becomes more valuable. If you've got a handful of users and you've gotten some feedback, that's yet a bit more value. And if you've thought about the problem for a long time, you will probably have a good sense of what are the main challenges and what approaches won't work. That's valuable too. I don't think there is a well-defined line between refining your idea and "executing" on it. Obviously there is a limit to how much you can accomplish in the planning and prototyping stage. However, I suspect it is a lot higher than is commonly believed. Working for 3 months may sound like not very much on the scale of a startup's lifetime (let's say 2-5 years before it either fails or grows big), but consider this: maybe the OP did 4 or 5 failed 3-month projects before he or she got to this one, which seems somewhat promising. Suddenly that looks a lot more significant than 3 months. For this specific case, we don't have enough details to assess whether the OP has really hit on something big, or if there is still a lot of uncertainty about whether the idea will pan out. So unfortunately, after all that discussion, I don't really have an answer to the original question. I think what I would do in your situation is to make my best guess as to the "fair split" based on what I've contributed and the expected future value (let's say I decide it's 70/30), offer the friend that split, and if he/she accepts, I would immediately change it to 65/35. That way, they should be happy, but things are still close to fair from my perspective.