If you do accept equity as payment for deferred comp, make sure that the company pays any income tax and other payroll deductions that are owing; you do not want to be hit with a tax bill for income that was paid in kind. This kind of grossing up of the amount owed to you should be acceptable to your investors, since it conserves cash.

Equally important, you should try to carve out shares paid for in deferred comp from any buyback agreement that your VCs require you to enter into.

Deferred comp paid upon funding is generally not compliant with Section 409A because funding is a not a permissible payment event nor is it a fixed payment date and therefore "funding" isn't a possible payment time. The way we tax geeks generally structure around this rule is to require the recipient of the deferred cash to be employed at funding for the deferred compensation to vest and then require that the funded deferred compensation be paid out within the short-term deferral period. Doing it wrong is a great way to inadvertently cause a problem (40% extra tax for californians, 20% extra tax for non-californians)