I think you nailed it with the 1% vs. 100% comment.

It really depends on what you want to do and where you want you business to end up.

It sounds like you would like to grow the business and have additional capital to do so. Just because he offered 60/40 with him in charge does not mean that is what it has to be. I would see how negotiable he is on that point and what his concerns are with you being in control.

I suspect that it has to do with how his dollars will be spent, which is understandable.

Just spit-balling here but maybe you could counter with something along these lines. Make a 51/49 split with you in control, but setup a "release schedule" in which he would have to approve specific investments before he gives you the cash.

There are a variety of other things you could do, this is just one idea. This way he had more control over what happens to the money and is not just giving you a "blank check", but you maintain control over the company.

This scenario requires you to establish a good financial reporting and forecasting process/system. But this is something you absolutely must do no matter how you proceed.