This is what CRV does, right?

http://www.crv.com/AboutCRV/QuickStart.html

Note #1 of "Why to Not Not Start a Startup" implies that YC also does convertible debt. http://paulgraham.com/notnot.html#f1n

No, that note seems to imply that there were other angels (not YC) who had convertible debt.

Yeah. And if yc got 38 % on the dollar they had to have been holding common stock (or something like it I am unaware of) or they would have at least got their money back.

Preferred shares don't really make sense for YC given the amount they are investing and the valuation at which they are doing it. It would be like hedging against exits below 100k, at which point, why would they even care.

I'm guessing convertible debt would be odd for them as well for one of the reasons given by Costolo and others: as soon as YC invests they are concentrated on raising the valuation of the company as high as possible, convertible debt would put them slightly at odds with this.

Oops, thanks for the clarification.