Leaving you 'empty handed', or only paying you the share of the incorporation fee also sounds unreasonable - you did invest time and effort and that largely remains unvalued in that case.
In the past I have dealt with similar situations by agreeing on the amount of hours and effort spend, and attach a market value to that. The leaving party then is paid that amount (either in whole, or stretched out over a period) and no equity is retained.
The thing is that I think it's pretty possible that he will sell the startup in the coming months - the startup itself may not be worth much right now, but since our programmers took far less than they should have, the source code has some value.
If you are primary looking to for the former, you could propose a deal where you get 40% up to whatever you both agree would be a market wage for the effort you put into the startup ($10/hr seems low, but I know nothing of your local economy). That may be more acceptable to Jim, and it keeps you from feeling like you got a raw deal if he has a great exit in a few months.
That's an absurd valuation and what he is willing to pay is irrelevant. Your time for this level and value of investment as a cofounder is worth more like $250/hr. Plus the fact you've been going without salary or compensation for 2 years gives this a risk multiplier. People routinely pay business consultants, legal experts, and other such professional help $300-$500 an hour outright. When the expert accepts equity in lieu of pay, the expected payout to account for risk is much higher. That's why angel investors might spend $10,000 on something and invest 100 hours, and end up with a $100 million return. So their time was worth $1 million per hour.
At this point it’s hard to argue for any cash value, but he definitely earned some equity.
$10/hr is reasonable for a normal full time developer job somewhere in between.
That is false.
That is false and also a bald faced lie by a bald faced liar.
No full time developer jobs anywhere in the world pay that. Not even China.
In the West, McDonalds pays more, as does WalMart ($142,107 per year average for a Software Engineer).
Most people acknowledge WalMart is a shitty company with shitty pay and sensible people can do better than the miserable $71/hr they offer for software engineers.
Assuming a 40 hour week, that's less than $11/hr. Belarus and Moldova are poorer countries, a figure for Moldova gives $7.
There are junior developer positions advertised in the UK paying £24,000 a year. Expect a 35 or 37 hour week and 6 weeks holiday, but it's not that much higher...
True -- except that's what they agreed to, as far as I can tell...