We are raising some seed funding from friends and family for our startup. The dollar amounts are fairly small, inline with typical YCom seed money $10,000-20,000.

Convertible Note's seem to be a good way of setting up these smaller funding transactions to keep things simple, and avoid valuations and costly legal expenses. I was reading a post on YC a few months back that linked to a bunch of legal docs, one was a Convertible Note template that seemed pretty good. But in the comments Jessica Livingston expressed some concerns on the usefulness/quality of the templates.

If anyone has done a convertible note to raise funds and has any referrals to quality templates or legal advice for this specific format it would be greatly appreciated.

Here is the link to the template found on Docstoc, and the article that referenced it:http://www.jasonnazar.com/2008/07/10/10-incredibly-awesome-documents-to-help-you-start-a-company/