Though this article is defending us, I disagree with it. What makes YC a good deal is not that we take common stock rather than preferred, but simply that we improve the average startup's outcome way more than the 6% we "cost."
YC is almost like a talent agent or broker -- finding the best hackers and setting them up with the logistical necessities, social connections, and advice. Taking a small cut of the transaction, entirely from the excess they create, is the only logical way to operate long-term.
Now that we know that Y Combinator is not a scam (I wonder how many established businesses applied to YC for the first round? PG?), I think it's clear you want to go with them.