Just looking for a straight answer from anyone that knows for sure. I had always thought that YC purchased straight Common Stock for their 7% equity.
This page [http://www.ycombinator.com/documents/] implies that it's Preferred Stock, whereas this old link [http://old.ycombinator.com/documents/YC_CSPA.docx] downloads a Common Stock agreement.
Y Combinator purchases common stock - approximately 6%. Y Combinator has a fund, called YCVC Fund I, that purchases a safe equal to 1% of the company (at the time of issuance of the safe). The safe is typically convertible into shares of the issuer's preferred stock (but could convert to common stock in a merger, for example). So between the two YC entities, that's 6% in common stock and 1% in a convertible security that will most likely turn into preferred stock. Hope that helps clarify!
