[MattPalmer1086]

As far as equity goes, it depends on whether you think it will ever be worth anything and if you are willing to roll that dice. I've been a paper millionaire twice at startups; neither paid off. Obviously the potential upside is high, so may be worth taking the chance.

EDIT: you say equity only pays off if they sell the company. What is the exit strategy for this company? Are they looking to be bought, and are there any obvious buyers? Is this more a lifestyle business for the founders?

If they don't have an exit strategy, then I'd say don't go for equity until that situation is clearer.

[ManchesterDev]

Do you mind expanding on your story here? Did the company just falter before you were able to realise your gains or was there something else more convoluted?

[MattPalmer1086]

The first company was merged with another during the dot com crash, as no further investment could be found. It had big customers, and was almost profitable. Our existing equity became worthless in the merger.

The second company just ran out of runway and failed.