I'll preface this by saying I'm not a big YC apologist. I've never been through it, I've never applied, I've directly competed against lots of YC companies, yada yada. But I disagree. I've dealt with VCs before and I've read enough to understand what dealing with YC is like, and they are much more different from a traditional VC than they are alike.

1. Anybody can apply, from anywhere, and you apply online. Good luck finding an online application for a normal VC, and cold-emailing partners isn't going to get you anywhere. Oh, and if you don't live in the bay area your chances just went way down of getting a meeting or investment.

2. They give you a nice chunk of money in exchange for a really tiny amount of common stock (I think it's common stock), have really nice terms, and don't take a board seat. I'm sure for many of the companies that apply, YC could take much more equity but they don't (and it would still be worth it for the companies anyway). They are paranoid about and lose a ton of money by restricting partners investing or taking their pro-rata rights to protect the companies they don't follow on with (this is my understanding of their policies).

3. They keep increasing their class sizes in attempts to get more people going through it. They created an online class that they offered for free to everybody to encourage more people to do startups and spread the knowledge.

4. They have a means of preventing and responding to investor misbehavior by threatening to blacklist them from YC companies. This is hugely valuable for your average entrepreneur as its helps to shift the culture in a way that is better for entrepreneurs (which has happened a lot in the past few years).

They aren't perfect. They don't claim to be perfect (case in point: the title of this blog post). But believe me, they are miles away from a traditional VC.