How a small angel investor can invest in conv. debt. without cap and discount? Maybe the no cap/discount are only for SV/Yuri but I guess that in any case startups (even if they need more than 150k) will feel more confortable with some nice cash in the bank, thus they will become more picky and will ask for hyper-strong favorable terms that not anyone will be able to afford (good for entrepreneurs). Therefore a lot of small angel investors can't invest anymore in YC startups (I guess YC will push out 100 startups/year - for sure a big chunk). Thus, they will go somewhere and the one who were able to invest, were able to invest at huge valuations whit less nice terms, so they will get smaller future returns (bad for the future of the ecosystem).
To conclude, my concerns are not about now but about the future cause there is a risk that we'll have less angels, then less money available for entrepreneurs. I may be wrong though...
(obviously we're talking only about investments into YC startups; investors can always invest elsewhere. So when I said "out of biz" it was more about the "YC related biz")