You should review the above question/answer.
I have gone through unsuccessful fundraising due to the terms inserted into convertible debt that I had to walk away from (you don't want anything to have "recourse" to you personally). I think Y-Combinator has a very good alternative to convertible debt, for both the investor and company.
Not that convertible debt is bad, but it is not the only option in town.
Full disclosure - I wrote one of the answers. I am not trying to self promote. Please go to http://ycombinator.com/safe/ if you want to skip over the Quora answers.