Road blocks for the development of the version two of our product


Starting up a business yourself is scary since most of the time there will be no one else with you for an advice. That is exactly my problem. I know this may not be the perfect place to ask this question. But I believe the people here can help me out. 

 I have a hardware startup, the first version of our product is already out there in the market. It is receiving good reviews. Currently, we are working on a second version of the product. But we've hit a major roadblock. The current technology we possess is not enough for the development of the new version. The only option we have is consulting a company who does research and development on a contract basis. Here is where I need advice. We want their technology and help but we still want to be in charge of the development. Is this how contract based R & D works? Any insights on this will be appreciated.