From the articles I see lately, it seems like there has been a pretty big shift at YC to help companies go from $1MM to $500MM rather than $0 to $1MM. Everything appears to be about pre-existing growth now.
It would be a disaster if that were true, because in this type of investing as in any other, returns are proportionate to risk. Fortunately it isn't. As I said in another thread, a quick sample of the current batch suggests half had no growth when YC accepted them.
YC does face a danger in this respect, because as it gets better known, there are an increasing number of applications from fairly established startups. To avoid that danger we make a conscious effort to fund risky outliers. E.g. the 17 year old kid from Bulgaria with zero revenues or users.
The saying in traditional business could be "everyone and their uncle".
You begin to attract people who apply for what might appear to be the wrong reasons.
You run into this with physicians. You find people who truly care about medicine and helping people. But then you find people who went into medicine simply because it's a career that has prestige and pays well.
There was this dichtomy that I observed when I was at Wharton (which has an undergraduate and graduate business school).
The UG student body tended to be people who were angling to make a buck when they were 10. It was in their blood and their family upbringing.
The MBA students tended to be people who had liberal arts degrees and then decided to "get their MBA". (Caveat: This was true when I was there which was quite some time ago and it may have changed).
Seems similar to how things like the Olympics evolved. At first participants had to be amateurs but later they started letting in the professionals and the amateurs could no longer even qualify. Good to see that there is a concerted effort at YC to continue to fund the amateurs but I can only assume that will be harder and harder to justify in the future.