It also protects you a bit because if something goes wrong, you don't have all your eggs in one basket. 

I'm trying to figure out the best way to have them transfer me their funds and put some kind of % on top that would compensate me for my time/expertise. 

His other line items I'll ask to only give him enough to get materials and pay him once project starts, and the remaining of the 30% based on work progress, so I can protect my own assets.

Any contributions you make to the LLC in the form of capital contributions should be recorded as owner transfers and transactions should be limited to business expenses and activity only in order to maintain the liability protections.

The estoppel would protect you in that scenario.

I often break it down into the "five pillars" of protecting your assets.

Once you have some assets to protect you may want to think about getting an LLC and/or a good liability insurance policy. 

The chances of them protecting your best interests is slim. 

At that point, you need to sit down with an asset protection attorney and create LLCs and Trusts to protect your investments.

My friend is not willing to give all the money upfront ( it is understandable), but how do I protect him and protect myself ?