It is the 4-year vesting schedule with a 1-year cliff, which raises a good point: If we take the $15k, it's essentially exchanging 25% of 0.5% equity each year ... so, after 4 years we would gain $60k at the expense of the 0.5% equity.
As far as we know, the company was valued at $8 million in its last round. So, that's giving up a potential $100k/year in exchange for a certain $15,000/year.
There's no proposal in the offer for ongoing stock options, and this equity doesn't require a buy-in per se (although I guess you could say that the buy-in is the $15k/year)
Are you sure about the bolded part? If it's a stock
option, it definitely requires a buy-in to receive the shares. At this stage his exercise price will probably be set at pennies per share, but those pennies can add up to real money when you're talking about thousands of shares. When (or if) to exercise is a whole other question. There can be substantial tax benefits to exercising early before the shares become worth much, but there's also substantial risk to doing so, namely the risk that the company will go out of business and your shares will become worthless.
Ask about the financials of the company. How much cash do they have on hand? What's their burn rate? How much hiring do they plan to do in the near future? This will help you get an idea for how much longer the company can stay afloat without additional investment. Once that point comes, the company basically has three options. Either they can find additional investors (potentially diluting everyone's equity quite substantially), they can get acquired, or they can go out of business. I would be very wary about joining the company if they were unwilling to give me this information up front. For a larger company it's understandable, but if they're offering you 1% of the equity you have a huge interest in knowing about the financials and being an active steward of the company's scarce cash.
Speaking of cash, be aware that as an early-stage company, every extra dollar going out the door can accelerate the company's path to running out of cash. Thus the founders may not be too happy with you if you trade your equity for $15k/year. Doing so increases the likelihood that they'll need to take a low-ball investment to stay afloat before they build up a good revenue stream. Furthermore, it would be seen as a sign that you don't really believe the company is going to be around in two years.
That said, if you really
don't believe the company is going to be around in two years, taking the $15k is a completely rational thing to do. Your creditors probably won't accept shares in lieu of cash for your debts, so there's that too.