Reddit mentions of Slicing Pie: Funding Your Company Without Funds

Yes, you are being unfair unless you are paying them market wages for developing in addition to the 5%.

I'll assume though, that currently you have $0 in revenue and you are paying $0 in salaries.

In that case, giving 5% in exchange for their labor is robbery. Even if they agree to it, once they realize their tragic mistake, you'll lose them and find yourself with half-written software.

I recommend you review:

http://www.amazon.com/The-Founders-Dilemmas-Anticipating-Entrepreneurship/dp/0691158304

and

http://www.amazon.com/Slicing-Pie-Funding-Company-Without/dp/0615700624

The former addresses a lot of the concerns I mentioned while the latter proposes an alternative approach based on contribution over time.

Before you make any substantial investment of your time or money, you should both read Slicing Pie to get some bearings on how you will fairly account for the resources you contribute to this business and how you will split profits. If you buy the book at any point in time, the author will give you all future updates to that text free of charge.

This would have saved me sooooooo much time had I known about this resource.