The YC
documents are probably fine in situations where the investor (i) wishes to purchase
equity rather than convertible debt, (ii) is otherwise somewhat indifferent
on terms other than percentage ownership of the company, liquidation preference and right of first offer in future financings, (iii) is investing at a fairly low
valuation (i.e. a couple of million dollars), and (iv) is only investing a small amount (i.e. a couple hundred thousand dollars or less).