There is a huge difference between playing games and designing games and an even bigger difference between designing games and producing a game, Anyone can come up with ideas for games that appear fun, most people can also get the design done reasonably well, designing fun games that can actually be produced with the talent and time available is far more difficult.
Investors require that you inject 25% of the startup capital. So you can start with $400,000 when you show an impressive business plan.
Problem is, a game like Braid or Limbo can't be made for that little. You'll need much closer to a million, since you don't want to go for the cheaper platforms.
Not sure where you came up with a million. Braid was made for 200k.
Using my model in my original post I could make it +/- 100k. So making a game like Braid is definately doable.
The question then still remains. Is my model a good model or not? Are my numbers good or not?
The best route when starting any business on a tight budget is to do the heavy lifting yourself, make sure you have the skills required to do so. (With a 4 person team (you + 3) and the compensation plan you suggested i would expect you to do atleast 30% of the work (Which, in a 4 person team means that you have to do alot more than just design), (if the game is a smash hit you're taking up to 70% of the net profit, and you get the money you invested in salaries back before the team gets a dime for their investment so you will have to show the investors(i'm not going to call them employees when they work for peanuts and promises) that you will deliver the goods)