Had a friend who was recently in a similar situation minus the YC part and basically it turned out to be a massive waste of time (and legal fees) when they decided he wasn't the 'right fit' for their culture. It was more of an acqui-hire, but the lessons learned are still relevant here. Start discussions but don't let it take over everything as they might just be testing the water.

So in summary, continue business as usual while you negotiate and be skeptical of their motivations.