You should iron this kind of issue out long before you start approaching people for capital, it is a recipe for disaster.
Also, most VC's are pretty savvy in picking up a significant difference in motivation between co-founders and it is a very big red flag for them to invest in you.
Get out while you can.
was just curious if people had encountered this kind of issue, it's a big deal, but it isn't like all the work/money I've put in has gone to waste ... the product, the contacts and what I've learnt is still rocking. I'll have to ensure the current co-founder is willing to walk away and won't be a pest in future (I doubt that'll be an issue)
That split may go well or bad, but it's a toss-up, and because of that something that you'd do best to avoid.
I've learned this the hard way myself, and since then I've only partnered with people once I had verified that our goals were suitably aligned. It's amazing how much friction and irritation you can avoid that way.
Think of it as a budgeting problem, the more of the budget you can allocate to productive stuff the more likely you are to succeed, friction between partners can eat up an enormous amount of that budget.