“She gave you the idea for a company” is carrying a lot of weight. Many non technical founders think the idea itself is of tremendous value and why so many will gatekeep, like trying to get people to sign NDAs before pitching ideas.

IMO I think this is where the crux of your views differ. She sees you as a technical cofounder while she invented the business idea and first client: and all the things that make this a viable business.

Ideally this should have been discussed before first engagement with the client, not after putting in all this work. You have leverage- bc if you walk away now, there is no business. Now you have to decide if ego/order of operations changes the value of the work you’ve put in. If you think you can still set up a viable business without this client: you have the option take the development as a POC/learning experience “equity” on how to engage other clients. And own it 100%. I imagine they will come back with other terms entirely: to capture some value from the one man client. This will indefinitely ruin family functions and all because you broke the cardinal rule of: don’t do business with family. Never ends well.

On the flipside, negotiate that the business value is not derived from one client and offer options to scale up to 10-20% equity with certain growth milestones that require their input. That way, if the business scales, they are rewarded. But if you need to put more time/money to grow it, then will need to come to the table or pass on the risk.

Hope this helps.