YC minimizes risk by spreading money across as many startups as possible using research and and gut instincts to find good deals.

Index funds minimize risk by distributing funds across stocks in an index using research and gut instincts to find good deals.

YC is different only in that it has a more direct impact on the performance of its portfolio through active participation and the ability to influence its management. Both are still similar forms of capital management with different degrees of freedom.