YC is (largely? entirely?) investing the money of Sequoia and other investors as well: http://techcrunch.com/2010/05/21/y-combinator-closes-new-8-2...

So it would be the same basic idea. Sequoia sees that there's a lot of money to be made by investing in good startups early, but also sees that there are people who are better than them at doing so, since their expertise is traditional VC rounds. So they give YC money to invest in super-early-stage startups, and YC and Sequoia share the returns.

There's no reason they couldn't do the same thing for someone who's interesting in angel investing but doesn't have the money or doesn't want to risk his own money.