Sounds like you should work with them. They know your industry, they know your product is good (yay for validation!). IMO, having a channel directly to users

Sounds like you should work with them. They know your industry, they know your product is good (yay for validation!). IMO, having a channel directly to users you would not otherwise reach outweighs any of the potential negatives. Plus, you said it yourself: they aren't really a direct competitor. I would advise against offering it for free. If they are cash poor, offer to split revenues on XYZ with them. If they are cash rich, you can try to license it, sell it, or any number of things. But if you have a revenue sharing agreement in place, their interests are aligned with yours. They will help/push you to monetize, and they will be highly motivated to buy you out if it's successful. So you get users, exposure to potential suitors, and a clear possibility of an exit strategy. I would ignore the "branding" concern -- branding is for the big boys and snake oil salesmen. You don't want to "build a brand", you just want to sell your product.