[bookhuddle]

I second the vesting strategy. Make sure that whatever you set up aligns incentives with performance and the company's interests. Since this person is still working at another full time job, determine what level of commitment you expect that person to make to your venture (i.e. 10 or 20 hrs/week until a specific date or a funding stage); determine when will he have to commit full time to the business.

Consider how much each of you has contributed in initial capital and sweat equity to this point, where in your company's development you guys are at (concept only, prototype, beta version, etc) and how what he'll contribute is worth to you guys.

Since there isn't a clear market to easily price your venture, it'll probably come down to an agreement that feels right to you and you can live with.

Definitely talk to your lawyer.