Replacing one founding member before company starts?

Our startup is comprised of 4 members. Each of the members is outstanding in some particular area; all are able to bring immense value to the team in their own niche, except one. The three co-founders all agree that the 4th member, our web developer, doesn’t have the attitude, work ethic or mentality to put into our concept. More than that, he doesn’t have the respect of his co-founders.

Our initial group wasn’t founded as a business, but as it a work-organized course where we paired up. The web developer just happened to sit at the table with us that day and ended up being in the group. It was a month or two later that the initial concept was brought up in our group discussion and the 4 of us ran with it.

He has contributed to developing a shell of a web page (wordpress), some mock integration with our employer’s platform and provided a template for a powerpoint deck. We’re not contesting the fact that he’s trying to contribute, we just don’t believe that the skills, background and ability to contribute are at the level where the rest of us even want to have him remain on the team. Since we work with him, we’re aware of his ability to code, and frankly, that’s my main concern.

Our startup has so far, built out a business plan, done the financial modeling and forecasting, presented the concept to our employer (directly to the CEO), and have secured an agreement with our employer to allow us to utilize company resources (servers, licenses, legal, accounting, etc) and act as our incubator during pilot. We, as founders, have all agreed that we need to discuss equity and the more than everyone (aside from the web developer) agrees that he’s not a fit for the company.

We have agreed that we must confront the issue and plan on speaking to the web developer this week, prior to our next meeting with the CEO and some potential partner discussions. We know that now is the time to act, but we don’t know how to value his contribution, or what is ‘right’ in this situation. We have mixed opinions ranging from 1-2% equity to a few hundred dollars to compensate him for his time. Other ideas were to ask him to step away with plans on future integration once we reach a certain size or some other deferred payment plan. I personally tend to lean toward an as little as possible mentality, but I do want to act ethically and want to figure out what the general consensus would be for what would be ‘fair’ to everyone involved.