My experience is that if you aren't deep into a stage where you HAVE to give away a cofounder title, just start working with the guy! When we associate the cofounder title it carries the stereotypical image of a cofounder which makes us double guess if this guy is "co founder material"--but there is no such thing as "cofounder material."
All you have are people passionate and skillful enough to help you start and execute your venture and people that aren't. Before thinking of someone as a "cofounder" think if he can practically help you with a skill you need that you yourself lack or aren't best at.
One of my issues with this person is that while I do like his company, and respect him in a lot of ways, we think differently about how to move things forward. I'm much more of a "below the radar, live cheap and get something working" guy, whereas he's more along the lines of "VC funding or bust", without even having much of a prototype. That just sounds bad to me. Though I recognize that funding at a later stage in the game would certainly help, I think we'll have a better bargaining position if we have something that sort of works in hand.
That's another thing... I believe more in having mostly technical people. Different skill sets can certainly be a good thing (the Paypal story in Founders at Work was a good example), but it's also a good way to start thinking "hrm... I'm building the code... what is that other guy actually doing?"
Juwo: I'm not planning on stealing the idea or anything like that. I have plenty of ideas of my own. The one he's hatched up is pretty good, but it's not going anywhere in terms of code or a web site or stuff like that. Just paperwork for investors...
If you can get going without any funding(which it appears you can) START. Yet if this guy insists on getting funding before ANYTHING else, he might just be an excuser or nonbeliever hoping the funding will validate his idea. Both bad things in a cofounder of a company that isn't even in development yet.
I'll leave some room because obviously you know more than I do about this specific guy and your situation. But if I had a cofounder who INSISTED on raising VC, he would have to be DAMN GOOD seller for me to buy into it--and chances are, we would still part ways as far as working together on that specific venture.
His idea of "if nobody is going to fund my future idea, then the world doesn't deserve it," is still actually... factual. Exactly. Don't fund that idea. DO NOT bootstrap that idea. Do not do that idea. If that idea really does require millions of dollars, do something similar and more basic to start. Don't do a half-assed job if you really calculated it would take you millions just to get launched. Remember, the world doesn't deserve it, and you can't build your idea. So build a smaller version. Simple. And you only have to get a few customers to be in the black, instead of millions. You just won't be on the news.
Oh, and it gives you something to do--scaling it up and adding new features--after your initial launch. While, if you spend all these years and all this VC money before you can launch, and nobody cares about your product when it's launched, you're probably going to abandon ship. So, if you need VC money just to launch, you're nuts.
If you accept the first one, it raises the bar for how much of the other two you need to acquire.
The question that has to be asked is "why does he want to raise the VC money?" Unless you need big money up front to build this thing (and you don't seem to think that's the case), I get the feeling that he desperately wants to be seen as an entrepreneur.
Entrepreneurs market the hell out of their product, but "Wantrepreneurs" just market the hell out of themselves.
Or to put it another way, is he in love with the product, or in love with the idea that he's an entrepreneur?
Possible, but it's also possible that he justs doesn't know that any other way is possible.
I came into an existing startup as the first technical cofounder. There had been a lot of previous design work, but no implementation. The plan had been to do a bunch of UI mockups, flesh out the design, write a business plan, and pitch it to a bunch of VCs. When one of them gave us money, we'd hire a bunch of programmers and implement the darn thing.
The first week after I joined, I started demoing. It was really crude at first - just a login screen in a barebones layout. (Heck, the product is still really crude - when we launch, it'll be yet another commodity CRUD-site, and it won't be until some months later that we'll have a useful differentiator.) But it was working code, and it got better every week.
The effect was pretty incredible. The cofounder who was all pitch-to-VCs-and-hire-developers ended up learning Dreamweaver and coming up with a kickass layout. And then he learned Flash and started out fleshing out large architectural areas, actually writing some Flash code. We applied to YCombinator, got turned down, and decided we're gonna go for it anyway.
Oftentimes, people just need to see that yes, this is possible, and that you can accomplish a significant amount on your own without waiting for a miracle to occur.
I'm a big fan of the "flywheel effect" mentioned in Jim Collins's books. It's basically "Start doing the right thing anyway, no matter how useless it appears. Keep doing it, no matter how useless it appears. People will eventually realize that you're going to succeed anyway, and start pitching in. Then the flywheel starts spinning faster." Many folks expect venture capital because they never hear about startups that succeeded without it; if you show them what's possible on your own, then you often get both the cofounder and the venture capital.
"if money is your first drive then you will eventually quit at some point when evrything says it is going to be over in One minute. At that point the co-founders who were in it for the money will walk out. The one who were in it for the passion and the challenge to learn and master the ultimate startup language ( not Technology, but "loyal and satisified Users") )will get 2gether and ask themselves " How the F&$ we got into this mess and how the F%^$ can we clean it up now, make it look good and have more users? "
In short: I have a potential co founder, which is something that everyone seems to say is good. The problem, though, is that I don't think this guy is perfect (he may well think the same of me), for various reasons. Ok, no one is perfect, but I know people that I think would be "about as good as you could get" (unfortunately they aren't available), and this guy doesn't measure up.
Better to strike out on my own, or throw in my lot with someone who's perhaps not the right person?
You can never completely trust VCs ;)
http://bnoopy.typepad.com/bnoopy/2004/09/hiring_no_false.html
You want the former, you don't want the latter. Someone who's not perfect but listens well, is interested in improving, and is passionate about the company will likely soon be perfect, or as close to it as you're realistically going to get.
If he's not really into it to begin with, then it doesn't matter if he's perfect, you still don't want to partner with him.
You both need the same drive to build something great. But you need to have different skills, different areas you enjoy working on. If you don't, you'll fight over the mythical bike shed and the hard solitary work won't get done. And there's a lot of hard solitary work in a startup.
are you planning to steal his ideas, or any part of them?
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update: thanks for clarifying that you wont! ----------------
My 2 cents:
WAKE UP!
He is doing the best he knows to do - pitch to VCs and raise funds.
You are doing the best you know to do - build a prototype and bootstrap.
Both are valid paths.
In fact, a former advisor - I say former because he was your cofounder's type. He had "no skin in the game" but kept forcing me for months, to abandon work on the prototype and pitch the idea and raise funds. But it worked for him - he sold a company in China to Disney.
Truth is relative - at least in this area.
However, when you say your cofounder is not up to par, "does not measure up" - even though he came up with the idea, to me that is not very respectful. You dont really value him. I can see a big fight looming ahead. Several months down the road, you will want to spend 90% time bootstrapping; while he will want you both to be pitching to investors instead. Unless - you do both.