I'm not sure about YC's case. But, at the base of it: Convertible Notes = Debt. Even though they provide a chance at equity in the future, that is not guarantee

I'm not sure about YC's case. But, at the base of it: Convertible Notes = Debt. Even though they provide a chance at equity in the future, that is not guaranteed. I have heard more than a few Angel Investors indicate they are in the business of investing in companies, not lending money.