Instead of an equity investment, have you considered convertible debt?

The risk with relatively small and early investment from you at a high valuation, is that the startup will need to raise the 500k at a higher valuation at 2.5M pre. What happens if they only can negotiate 1-2M? Your stock value could be cut in half.

Overall, the convertible debt will give everyone more flexibility for raising the 500K round, and since it sounds like its critical, you'd rather not have any restrictions on it.