Thinking about this even more, the company is only cash flow positive because they are not paying you. And if they are not paying you, the question begs who els

Thinking about this even more, the company is only cash flow positive because they are not paying you. And if they are not paying you, the question begs who else are they not paying. Just because the CEO has sold multiple companies and realized profits for previous investors, does not automatically make this a golden egg as well. Finally, just because the CEO says you are at the top of the stack and future funding will not dilute you, does not mean it will not happen. In fact it is fairly certain to happen if additional, bigger investors come on board. If you want to get an idea of the dilution, Google an Excel cap table example (there's actually a pretty good one on http://cooleygo.com http://cooleygo.com) and play with the numbers a bit. I would honestly skip the whole deal, push for either them to pay you what you are owed to date or go with a convertible note. I would also talk to an attorney before I made any decision. It just seems to me that the CEO is trying to make it sound like a great deal with no risk, when in essence the risk is enormous.