Run like hell. Royalties and shares in a company means "never".

He says that he can offer me payment at a later date. Also, he says the only thing he can offer me now is royalties and shares of the company. What should I do with that?

(unless it's shares in an established, publicly traded company)

Will do!

Just go with it. Experience will help you fine tune your rates. Maybe you'll discover you work quicker when being paid, or it takes you way more time than you thought, and you'll adjust accordingly next time. If the customer accepts the rate, and you think it's fair to you as the artist, just run with that.

You're being so helpful! I dont understand why you bashed me on the other thread. I was just trying to help. But umm, I have another question now. He says that he can offer me payment at a later date. Also, he says the only thing he can offer me now is royalties and shares of the company. What should I do with that?

Don't take it personally, I don't know you from anyone else on the boards. I just respond to information (or misinformation) as I see it.

Anyway, if you want to do artwork for the hell of it and to improve your experience/portfolio, expect that this studio will never pay you and you're doing pro-bono work. If you were only doing it to get paid, respectfully decline and find something else. DeviantArt's forums or Conceptart.org's forums both have sections where paying customers are looking for artists, you can check there.

Understood, but yeah I'll just decline. I have enough on my plate as it is and I was only doing this extra work for the money.