The main issues revolve around some topics I hadn't seen elsewhere.
1) Will Paul's talent filter function work as the influx of applicants grows? One poster suggested he doesn't think a 3x is possible. I disagree.
2) What happens when older, more seasoned folks see this? Will they see this reduction of risk as the opportunity they have been waiting for to start something? Don't underestimate the power of "what if" and "what could have been" for people who have been working for 10+ years, but kids/mortgage got in the way of starting something.
3) What will the angel response be? Offering more money in the next go round isn't the right answer. Yuri have removed the risk premium from angel investing. That's huge.
4) Is it possible that there is too much of a choke point, now, for talent selection for YC? Will the ecosystem continue to flourish, or does it run the risk of stagnation, because the selection criteria doesn't allow for random mutation?
5) Will financial engineering take hold? With a few players doing this, things could get messy.