Jason and PJ: thanks for your help...
The situation is the following:
There are 2 co-founders who invented the product. they hold a design patent jointly.
Co-founder 1 is the expert on the use of the product.
Co-founder 2 is the expert in manufacturing the product.
Co-founder 2 has his own manufacturing studio- where the product is made.
The company they started together has been paying the rent of the studio.
Both have agreed to a 40/40 split. They gave 10% to 2 other partners who provided funding.
Co-founder 1 does all the marketing, promoting, etc. Co-founder 2 sits in his studio and waits for orders to come in. This was ok because Co-founder 2 also works on other income producing work not related to the company (he has a production firm where he is the only resource).
Co-founder 1 secured their first deal where firm has purchased 75 of their products at a 30% discount. The total order was for $16k.
Co-founder 2 is the ONLY person who knows how to make the product. He has not been willing to share the production process up to this point. He covered the up-front costs of securing the material needed to create the products. He remitted an invoice to Co-founder 1 charging not only the cost of the material, but an hourly fee for his work at $75/hr. in essence, his invoice is for more than half the total sales amount.
in addition, he expects to receive his 40% of the "profits after expenses."
How do we create a fair and equitable situation for all 4 involved?
The 2 who provided capital feel that Co-founder 2 is 'double-dipping."
Is it customary for co-founders to charge their start-up for services rendered?
I appreciate any and all suggestions.