When I was in a similar situation I declined. (I was going to offer to contract, but then an absurdly low offer came in via email.)

It turned into a series of email flames from an "entrepreneur" that involved references to Frodo and the Ring.

Needless to say, the company burned out super-fast. The guy running the company didn't realize that he has to pay market rate in order to attract talent; and if he can't pay market rate, he has to reset what he's trying to do in order to meet his budget.