It will be interesting to see how this affects the other YC-alikes. Will they feel pressured to compete on "price", or is demand for funding so great that they can keep taking the same equity they used to?
They probably really need to compete on prestige. Owning 94% of a company that's worth millions is way better than owning 98% of a company that fails, or even one that's worth fewer millions, so founders really should go with whichever accelerator they think will give them best chance of success
So the main thing that Techstars et al will probably need to do is convince entrepreneurs that they're a really good, rather than enticing them by offering a few thousand dollars more for a couple percentage points less equity.
"Is Y Combinator an incubator?
No. The defining quality of incubators seems to be that companies work out of the investor's space. We think that's a bad idea; it makes founders feel like employees. "