Doesn't matter. The founder hired the designer verbally. I imagine that the judge will first determine if there was a verbal agreement, and then, if there is disagreement about the terms, use common sense and vague standards to determine the correct remuneration. It's not actually that complicated.
Golly, how dysfunctional do you think our justice system is? Do you think that people have absolutely no recourse to address small disputes like this one? It's true that when you need something other than money and/or money over $10k (in CA) you need a general lawsuit, but small claims court exists for handling stuff like this.
Regarding venue, the rule is that you have to file in the location the offense occurred. Stuff on the internet genrally favors the plaintiff, because they can claim it happened near them, forcing the defendant to travel. Travel costs alone can eclipse the amounts in these cases, so deciding venue is important.
