Convertible notes are common across all companies raising early (seed) money, even ones outside YC. I don't know the landscape now, but the last time I was involved in raising money (2011 Q2), convertible notes were the presumptive default for that type of raise. Angel investors did not care at all and VCs sort-of cared, but the amount of money was so small for them that things like pro-rata participation rights were vastly more important.