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"?
Since you are in the early stage, I am going to assume that you will be looking for multiple fund raising rounds.
I would say that non-dilutive stock is almost never a good deal for either the grantor or the receiver. From the company's perspective, it makes VC funding much more complicated, especially if you have many parties funding you in future rounds. The math is complicated, but there is also much uncertainty (from all sides -- your side, the partners side, and an investors side) about who will have the largest share of the company in an extreme upside scenario.
From the receiver's side, non-dilutive shares can be quite troublesome if there is an IPO or other liquidity or sale in the future. They are tougher to value and can cause future deals to fall apart. I don't know your individual situation, but the 25% of common stock sounds like a better deal to me, as you and your partner will at least be in the same boat together (even if you own more of the company).