Here are some questions I recommend the teams I advise run through when they're looking at these kinds of issues. (And this is the late night edition so I especially ask fellow FD'ers to audit and feel free to add or disagree):
1. Are they internal to your company or an external team? Sounds like they're external. People with equity are betting on the success of the company, the value vests over time (as Archer mentioned above) so people have to keep helping to maximize value, and that's the kind of commitment you want in house. External teams are betting more on the success of the individual product(s) they touch, which can make a royalty the more reasonable choice, As Brian points out above, if you're not in-house shares can feel like funny money you have no chance to make more valuable.
2. How much difference is there in the quality and delivery date of your product if Acme Software implements vs. Betelgeuse Software or Charlie's Software? If they have unique expertise or can make unique creative contributions that fundamentally reduce risk and raise quality, that's a real argument for a royalty, they'll earn it and it should motivate them. If Choice A gets 92 points on your scorecard, B gets 89 and C gets 87 then what you need may be brilliant and useful but its implementation is straightforward. There is no reason to pay a royalty for straightforward implementation UNLESS you get a below-market up-front cost, so the (risk reduction + contribution value = reward) equation stays balanced. Projects where a lot of different teams can execute successfully generally can be done as work for hire without royalty if you're willing to pay a rate where they make money, and you can use targeted bonuses in a contract to give upside and motivation without the open-ended exposure of royalties.
3. How many teams have you talked to and vetted? Ideally you want multiple responses to your RFP. Especially when non-technical founders do not yet have tech leadership there is a tendency to want to go with the first strong team you meet, because suddenly you have a path through the jungle where none was present before. Finding more options before you close a deal is well worth doing, and there are "CTO for Hire" consultants who will help you find and vet them. (I'm a Strategy, Exec Coach, Production and Design type, although I was a programmer earlier in my career, so I don't do CTO work.) They're expensive consultants, but if you don't have a tech co-founder or employee yet it's way better than making a leap of faith with the first team you find. (This drove me nuts when my team was the first one in the mix because we had a great track record and then we had to deal with competitors, but from the client side it's still good practice.)
4. How regularly will you update the software? How long till version 2.0? Will they be doing this or will your in house team take the process over once you're up and running? If the external team moves on then a royalty in the original Work will stop generating revenue, and later versions (Derivative Works) will have a lower royalty (if they made unique contributions) or no royalty at all. IMHO it's critical to not grant a perpetual royalty in a product line, or in more than one version of a product -- I've been brought in by companies to unravel the problems this can create, and they're significant. If their team does the updates, improvements etc. and continues to add unique value then the royalty in the next version is completely reasonable, but it's negotiated separately based on that contribution.
Royalty life expectancy can be an emotional issue and has to be handled with some tact. Even when they're implementing someone else's idea and doing a solid but routine job of implementing a spec (vs. designing it or enhancing it) I've seen team leaders get emotionally stuck on long term royalties even though they produced essentially the same software that Team B or Team C would have produced. A specialized software development attorney will help you craft a deal that's fair to both parties, but if the dev team seems emotionally disabled over the royalty issue and aren't adding unique value (or reducing risk in a unique way) I'd pick a different team to work with.
5. Are they more than an external team, they're key creative parents of the product? Or maybe they're the only ones who've actually figured out how to build a robotic duck billed platypus, which is what you happen to need? Are both your and their ideas and creative DNA intermixed with lots of genes coming from both sides? Then many of the cautions I just described don't apply, because they really do have a critical role and deserve a critical stake in the rewards for the project, which brings us back to the points in Question 1 above.
Hope this is of use to you!