exactly! I spent three weeks haggling - I should have figures out terms in 24 hours or less or simply given them a check and let it ride into future terms.
a) They wouldn't have turned around for advice from YC
b) YC deciding to come over the top once hearing the news
I agree with your assessment that YC was probably trying to keep dumb money out of the cap table but I also hypothesize they originally underestimated the team and once they saw they were actually able to put a TS together that was proof enough their original calculus was wrong and they circled back around. I don't think you were getting this deal either way.
Is it prudent though? I understand the need for expediency, but surely you need to do some due diligence?
I think the comments have gone off on a tangent focusing on whether you getting cut out of the deal was ethical (whereas the blog post was just a flat out interesting story to read about). But at least the way your post reads, you definitely got screwed out of the deal. Sure, nothing is done until things are signed, but as many investors have told me "my reputation is everything". Seems like it should go both ways. This certainly doesn't reflect positively on the founders.
Nothing's done until the papers are signed. This goes for all things in life, too, from investing to renting apartments. If you don't have a signed piece of paper, you have no deal.
In any case, I apparently place too high a premium on paperwork. In another comment thread on this story, someone pointed out that the remedy for breach of contract is to unwind the wrong party's situation to the position they were in before the contract was signed. In this case, until the check has been deposited and spent, it's trivial to tear up the paperwork.