How many employees do they have? The less the more likely you are to negotiate a good stake. I don't think it really makes sense to apply financial calculations at this stage. You might be underestimating the amount of equity you can get.

What I'd do is keep the table open - make them hire/pay you for a month or two, then negotiate. You can probably get way more if you develop a good relationship.

EDIT:sorry, sounds like you already work there

If they're <=5 people don't be afraid to say 5 or even 10%.