As an early stage investor for more than 15 years, here are a few points to consider:
(1) I strongly prefer negotiating a priced equity round. This is the most fair for both investors and entrepreneur. Negotiating a valuation is the first test whether the entrepreneur and I will be a good match. Investing in a startup is the beginning of a long term relationship. Life is too short to spend time on a poor match, which will be costly personally and financially for both sides.
(2) Will do convertible notes on occasion. The valuation cap should be based on TODAY'S valuation when money is being invested.
(3) SAFE docs are a non-starter. Only appropriate for earliest stages (friends and family round), not professional investors.
(4) Royalty-based returns can work in special cases. Important points: (a) the business must have high margins that can withstand the drain on operating cash flow, and (b) investors should avoid taking investment risk for lender sized returns.