I'm developing the product and i have a key technical guy working with me. I've 100% ownership and he's asking me 25% of the company or 7.5% non-dillution stock and 7.5% common stock. What's the best deal for me? And what kind of issues i can have dealing with VCs having the 7.5% "golden share"?
Really depends on how many rounds of funding you think you'll need. Most startup founders have their equity diluted anywhere from 15%-33% after 2-3 rounds of funding. If he is a key partner, then 25% is fair and a better deal for you. VCs hate preferred shares being issued because it just complicates the math and flexibility in the future.