Bringing my developer in house full time will provide a small short term lift in revenue with increasing value as the company grows and scales to multiple web properties. He isn't interested in salary as much as equity. My 50/50 business partner and I on the other hand are not interested in giving away equity. We are open to profit sharing, or any other creative solution that will continue to motivate and incentivize him for the long term without having to give up a % of our company. Any feedback greatly helps - thanks!
Start with an honest and transparent conversation between the three of you. Bringing someone in-house F/T when they've been working remotely P/T changes the relationship dynamic, so it's important to emphasize honesty, respect and approachability on all sides from the get go.
If there's an impasse around anything financial, explore other options that your developer might consider to be equally as important – both in the short and long term. Telecommuting, flex hours, additional health benefits for their family are just a few options. Longer term, if you see potential in them as a tech lead or CTO, paying for outside technical or leadership courses may be exactly what they need to feel you're making an investment in them.
I'm happy to jump on a call to talk further, and help you create a plan.