Hard to say objectively what the right option would be without more info. Footflaps has given a pretty good view of what it might be like. Some other angles below.
The established company could be a route to a great deal of learning from experienced development teams, or a slow moving mess of legacy systems. Similarly the start up might be a great opportunity to get into an exciting new technology area, or he could inherit a horrific mess from the contractors.
So for me, I’d choose startup – I’ve been in a small company for years and despite a lot of ups and downs, its consistently interesting. I would be looking to qualify the opportunity as others have described in terms of funding, and my ability to deliver it. And go into it eyes open that it could be short lived.
It sounds as though he is going to end up with a great deal of responsibility for the product – is he up for that, and the stress, pressure and hours that might go with it? How does he feel about the possibility of having to get involved in the recruitment side if it goes well and he has to help grow the team? What if