1. If they are providing you a significant portion of equity and salary. Look at it as an acqui-hire.

2. If you have revenue and are growing then perhaps your evaluate the opportunity differently ask have them buy your company out.

3. If you want to stay on your own then stick to it. Don't worry about the competition it just motivates you to stay ahead of them.

4. If you really want to work with them and have your own company. Create a JV (joint venture) you have a lawyer work through this to iron out all the details.

If you want to talk just give me a shout.