This is just off the cuff, but based on having a fair bit of experience in things like this...
What you're describing doesn't sound like the beginnings of a real solid company. IMO, what you're most going to get out of this is experience and resume fodder (which will likely be highly valuable in the future).
EVERYTHING is always negotiable. Rather than put up a shit fit up front, it's probably best to take the 5% and start plugging away. You could push and argue for more, but it's more than likely you'd be spending time arguing for a larger stake of nothing (not trying to be negative), especially if you're only being offered common shares anyway with no preferences.
IF the thing actually gets legs, than a large part of it will be due to your efforts, and you won't have any problems arguing for a second grant during the next funding rounds (which would pretty much obliterate any grants you get at this stage anyway).
