Right, Investors should be willing to pay any price. Except YCombinator who invests at a valuation of around $0.25M. Which isn't value investing, because value investing doesn't exist for startups. ;)

When a startup is crazy successful, it doesn't matter what price you paid to get in. But in terms of portfolio, price does matter. The higher the average price you pay, the fewer deals you can afford to be in, and the lower your chances of getting into that one runaway success. Sure, its far more important to choose the right companies. But it is rational for YC, and others, to be price sensitive.