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It comes down to trust, because legally, I don't think your bases would be covered. I'm in a similar situation, working as a consultant. But I've known the CEO for several years and trust him. We are in the final phases of adjusting the LLC and giving me shares. I've been willing to defer this for a while since there is a decent amount of costs involved setting this up correctly so I don't get taxed on the shares.

Come to think of that, this could be a serious issue for you. Lets say that everything goes smoothly and you do get funding. At this point you get shares, you will have a taxable event based on the value of those shares. This is true even if you are never able to sale the shares. You still owe taxes on them. If you get your shares now, the valuation of the company will be much less than later and therefore the tax you owe will be much less.

If you don't trust this guy a lot, I'd push to get it set up correctly. Or at the minimum have a lawyer draft up an agreement and talk with an accountant to figure out the tax implications of this.