Many comments here say this already but from the way you describe it, most of the work by far is ahead of you. Most startups put vesting schedules in place for this very reason, and two years in you'd typically end up with half of your equity. Even IF that were the case here, Jim should be pretty bummed to let someone walk away with 20% of his company at this early of a stage. If I were him, I'd fight anything more than say 3-5%, or maybe paying out the fair market value of your work.

I'm not a lawyer, but if there's an invention assignment agreement in place the IP would be owned by the company, not Jim, despite his $ in, and thus it would be hard (not impossible) to dissolve and re-form.

Fail fast and move on to something new. Good luck.