[tyre]

Their 7% stake has pro-rata and YC publicly states that it will follow-on to maintain that ownership up to $300m valuation.

The 7% ownership also allows YC Continuity to be more attractive to later stage companies. If YC already has a 7% stake, then it only needs to invest an additional post-money 13% in order to raise its ownership to 20%. A new firm coming to the cap table would want to invest 20% post-money. So, if the company doesn't need 20% capital, then YC Continuity has a significant advantage.

[jdoliner]

I think YC only fairly recently started exercising their pro-rata. IIRC there was a while before YC Continuity was started when they didn't have funds allocated for pro-rata. They've had it for a while now but I think they may have missed out on some of the earlier successes, like Dropbox, Airbnb and Stripe, which is where a lot of the gains have been realized at this point.