Founders will sometimes say "if I can't build this company with no more than a million dollars, it's not worth building it at all." In isolation, that thinking may not be wrong, since it highlights the importance of frugality and the product market fit. But in connection with the easiest influx of capital you will ever experience in the lifecycle of your company, paired with valuations that are super high on a risk-adjusted basis, it would be insane not to say yes to a war chest of a few million dollars that you put away for the rainy day.

So no, I don't think that YC companies will raise any less, or will be any less concerned about being ready for Demo Day. The one thing that might happen is that the earliest investors will see a hike in valuations. In the past, investors with the strongest value add (reputation/brand/connections/etc) were able to get in a few weeks before Demo Day at a discount. Since Demo Day investments are characterized by a very weak signal-to-noise ratio, knowing that a reputable investor is bullish on a startup tends to increase the demand to such an extend that the resulting higher valuation more than makes up for that initial discount.

Now that this additional $500k is going to be valued against the lowest valuation, it will increase the barrier for giving discounted deals.