I was in YC, and I think this is an awesome idea. You can replicate lots of the value, even if you don't have PG giving office hours. However, five isn't enough. Lots of the value from YC was to hear lots of different ideas and opinions and feedback, and you won't get that with five.

What's the downside of taking 30? You're not taking investment, not providing mentorship; there's no cost to taking more.

You're going to want to arrange stuff for you to do, right, speakers for example? So you should split the effort of getting angels to talk, between the companies who join.

Finally, no-one is going to want to give talks (very high value) to five groups, and there will definitely be no demo-day (ultra-high value) with 5 groups.

With five groups you'll gain very little (some, but little). I'd urge you to accept as many groups apply, to a limit of 30-ish at least.