Well, no. As you write yourself, if you insist on pay, and they cannot get funded and have to wind down, you're first in the line. You may not get a large percentage of what's owed, but you'll get something. And if they can get funded, you almost certainly can get everything owed.

If you take equity and they cannot get funded, you get nothing. If they can get funded, the way they avoid showing the terms, it's extremely likely there are the kind of shenanigans TFA describes and you'll get nothing.

Really, the only scenario where taking the equity makes sense is if you believe the company will do well and the funding terms will be be favorable or at least balanced. And it sure doesn't look like that.