I am not totally convinced that he knows the space well myself.

I find myself trying to justify sticking with them, maybe negotiate a lower working time/commitment for the same pay (provided that they cannot afford to increase the pay) in exchange of losing this friendship and potential network.

Although I still think I'd be shortchanged.

Another worrying trend I feel is that while I'm probably 'employee #1', I find myself doing more architecture/design work than the technical co-founder as he is a relatively new programmer.

What would be a good way to ensure that I do not burn bridges while negotiating and/or rejecting?