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Generally things are initially verbal so they don’t spend a bunch of time typing up documents for nothing. Especially if it’s a small company where everyone is wearing multiple hats. No red flags for me as long as the formal document contains what you initially discussed.
This is the standard process in Fortune 100 companies. The written offer is final and often, cannot be changed. This is why we let applicants negotiate when a verbal offer is given.
Tell them it sounds great, that you're excited to join the team, and to send the offer via email so you can make sure you are clear on the scope of the position and compensation before signing.