If you do not take that approach he will hold you over a barrel, all he has to do is to get you to sign a contract that will allow him to either wait until somebody else approaches you and he can claim his fee based on exclusivity.
Otherwise he's just trying to get you to cough up.
His only renumeration should be a success fee paid from any investment he comes up with (and it should be a percentage with a capped $ amount).
This is a common tactic, trawl the web for promising new ventures with 'green' management, get them to agree to some contract and then sit back and do nothing. Or pass you some lame leads to prove that they're 'working hard'.
Management consultants on the prowl are the ambulance chasers of venture capital.
I'll bet you he can get you a nice deal on those patents as well (referral fee for him from the patent attorney that he's pushing).
These guys are mostly full of shit, talk to them, listen politely, learn as much as you can by pumping them, don't get pumped yourself, don't agree to anything and show them the door.