Good idea but this would require us to wait till we raise funding, and therefore have a valuation. We are wondering if there is a way to resolve this right now so that it doesn't complicate an already complicated fundraising process.
If you don't have a premoney, then cut him a fair salary for the time he worked in a convertible note. The convertible note will be the optimal way to have a nice looking cap table.
I just suggest that you deal with this matter quickly while everyone is in a good mood. Success in a business after someone leaves can be dangerous...