Some big questions that you should answer.
Are you excited about the product's potential or the company's potential? I ask that question because I assume you must be excited about one or the other, otherwise, why even propose such a thing. if you're excited about the product, I would pose a scenario of development at a reduced cost and a royalty on every product product sale up to some multiple of your invested development or over a fixed time period, as an example. If you're excited about the company, be careful, because as several of the other folks mentioned, taking equity in lieu of dollars makes you minority investor and them a partner. You have to really do your homework/due diligence before you take this leap. Remember, while you are a businessman, you are, at the bottom line, a developer, not an investor. Take it from someone who has been an investor, never an easy task even if you know what you're doing. Take a royalty deal or walk away.