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I don't really see a problem here. I think your are on a great path.

Well, talk to them. Just don't do something you don't feel like doing. If you want to open-source your stuff do it. Put it under a business-friendly license and there should be no worries.

I guess, they just saw a lot of potential in your abilities. They're probably interested in powering up their work force a bit.

If you get a bad feeling about what they propose: don't do it. And don't make any decisions on right the spot. Don't let the pressure get to you.

If you should bring people or not depends on what kind of meeting it really is and what they want. Can you find out more about them? Well, they are talking about collaborating, so I'm fairly sure you don't need to bring a lawyer IMHO. I'd go alone.