[jacktoole1]

The second paragraph of this is the best piece of advise I've seen in this thread. I disagree with the conclusion, but the action is spot on.

Talk to him. Explain to him that you think he's onto something, but that you believe your team will be better able to implement it. There's surely an agreement you can both make that puts you both in a better place. Offer to take him on in some capacity - it sounds like you value his business plan etc., so if he is valuable for the business side of the company, see if he's interested in merging in that respect. If his partner left, this might be just the opportunity you are both looking for. If he absolutely won't join, offer him 10% for the idea (if either of you succeed he's better off).

If you steal his idea, especially without trying to make some arrangement first, you open yourselves up to (a) legal issues of you succeed, or (b) perhaps worse, if you fail, you look like a total jerk. Is this idea so good that you would like to risk your reputation on it? (If so, the guy probably deserves some credit.)

I generally agree that implementation is 90% of the effort. But if your new venture will be benefitting from the discussions you've had, which I believe it's fair to assume were under the premise of you not being a jerk and screwing him over, then he deserves the opportunity to be a part of what he started.