As an Angel Investor, your investment is the start of a long term relationship. This is not like selling your house where maximizing your return is of paramount importance as you will most likely never see the purchaser again. Your objective should not be to get the maximum equity for your investment with special terms to increase your returns. Your objective should be to get the maximum return when the company is bought or merged out, or goes IPO.
Please note that there will be subsequent funding rounds some of which you may participate in. If you put in some onerous terms like non dilution then it will be next to impossible to get subsequent funding. This of course will negate your objective of maximizing your return. If you get too much equity versus the founders, subsequent funders will insist on cramming you down and providing more equity to the founders.
What appears to be a happy medium thru empirical study is that the founders give up 20 to 30% equity for the Angel round. I insist on convertible preferred stock with drag along and piggyback rights, along with the right to maintain your equity position in subsequent funding rounds. Sample of these terms can be found at www.seriesseed.com and www.nvca.org.
I do not do convertible notes unless the cap is low enough that it satisfies the 20 to 30% rule. I also will not negotiate with lawyers who feel their job is to get special terms and condition that favor the founders. I also will not negotiate with lawyers who want to change the wording so as to make it “better” or “they are more comfortable with this wording”.