CASE NO. J-2026-386088

Brandon v. His co-founder

📊 Hon. Marcus Okonkwo presiding · Filed June 13, 2026

The dispute

I built the prototype before we incorporated. He raised our seed round. Now he wants 60/40 equity instead of 50/50.

Plaintiff's argument

“I wrote the entire prototype over 6 months on my own time before we agreed to start a company together. He came in week 4 with no code, no commits. He raised $400K, which is real, but it is mostly his network — not his hours. 60/40 disrespects what I built.”

Defendant's argument

“The prototype is worth nothing without the capital and network I am bringing. $400K is a year of runway. Without me there is no company. Daniel is undervaluing the harder of the two contributions.”

VERDICT

Split ruling.

“The Court finds for neither party in full: a 55/45 split in Plaintiff's favor reflects the asymmetric pre-incorporation contribution while crediting Defendant's capital-access value.”

The Court's reasoning

The Court analyzes this as a decision-quality problem. Defendant made a predictable decision error: optimizing for leverage over accuracy, treating fundraising velocity as a substitute for a complete contribution ledger. Raising $400K off a network you built before this company existed is not the same as building the asset that made the raise credible. At the same time, Plaintiff's error is underweighting the counterfactual — a prototype without runway has an expected value that trends toward zero, and Defendant's network is a depreciating asset that was spent on this company's behalf. The 50/50 Plaintiff demands ignores real asymmetry in the other direction; the 60/40 Defendant wants ignores that the prototype was the raise's primary proof point.

Findings of the court

I.I. The prototype represents approximately six months of uncompensated, pre-agreement labor — a sunk cost that nonetheless created the company's entire technical foundation and fundraising narrative.
II.II. The $400K raise is a concrete, time-bounded contribution, but the Court notes the capital derived its credibility largely from the asset Plaintiff built — the two contributions are not independent.
III.III. Defendant's network is a real but non-reproducible input: it was spent once, whereas Plaintiff's technical capacity compounds over the company's life.
IV.IV. The revealed preference here tells the Court that Defendant waited until post-raise to surface the equity demand — a sequencing choice that functionally reduced Plaintiff's negotiating leverage and reflects poorly on Defendant's decision quality.
V.V. Neither party memorialized pre-incorporation contribution terms in writing, which is the shared root error and the reason this case exists.

Awarded “damages”

To the Plaintiff:

Plaintiff shall deliver to Defendant, within 30 days, a written technical roadmap covering the next two product milestones — demonstrating that the prototype is a living asset, not a static artifact. Completion measured by Defendant's written acknowledgment of receipt.

To the Defendant:

Defendant shall formally retract the 60/40 proposal in writing and replace it with a documented 55/45 agreement that includes a vesting schedule with a one-year cliff for both parties, applied symmetrically — this being the one structural safeguard both parties failed to install before this dispute became necessary.