I have raised money for companies ranging from startups to Fortune 500 companies, as a founder, an independent director and as an agent. The main salient difference is not so much deferring valuation (unless you give the convertible buyers a ratchet) as it is the trade off of who gets what in the case of huge success on the one hand or utter catastrophe on the other. In the case of huge success, its better to sell less equity so the convertible is probably the way to go. In the case of utter catastrophe you dont want a fight over who gets the desks and pencils, so in that case its better to have sold equity. Its all pretty much no more complicated than the calculus of greed on the part of the founders. Good corporate finance practice formerly dictated that issuers only sell debt if they have cash flow to service it, as few startups do. If you would like to discuss this further, let me know.