Friends-and-family acquisition capital: what terms actually work for search-style deals?

I'm a self-funded searcher (HBS MBA, prior military, PE deal experience) targeting a $1–3M EBITDA services or manufacturing business. I am raising a portion of the acquisition equity from friends and family who are sophisticated investors, but do not have search fund or ETA experience. I want terms that are (1) simple enough that a non-ETA investor can understand them without a 2-hour education session, (2) fair enough to protect the relationship if things don't go as planned, and (3) don't obliterate my upside if the deal goes well. I've been thinking through a few structures: a. Convertible debt. b. Non-participating preferred with either a hurdle rate or MOIC c. Participating preferred with a lower hurdle d. Dollar-for-dollar common equity on total project cost e. Common equity with a step-up For those who've raised from friends and family on a deal: which structure did you use, would you do it again, and what (if anything) blew up that you didn't expect?