Have you told her how her words make you feel? She may not understand what her words sound like, especially if she isn't meaning to sound that way. I would start there. You post that you both are dear friends, if that is the case and you explain to her how you feel she should make an effort to not make her friend feel like less then.
If you are engaged in a business venture I fail to see how her putting your methods down makes any business or financial sense, especially considering if she as the class co-instructor doesn't value her product (the co - class) how can she "sell" other people on it?