Reality is VC is herd mentality which relies on deal flow to be successful. Winning firms see the best startups, invest first and the cycle continues.
YC is a devilishy clever way of front-running[1] VC deal flow. They give you a peanuts amount of money, a lot of abstract culture/network spiel which does have some value (i.e.- "it's who you know, not what you know"), and they get to see all the deal flow first. At the end of the day, its a way to step in front of angels and VC firms. Like any investor, they only care about the investment. It seems a bit culty too, but that's the valley[2].
More entrepreneurs should follow the bootstrapping advice of Dr. Terman and shun "joining established firms".[3]
[1] https://en.wikipedia.org/wiki/Front_running [2] http://www.wired.com/2014/04/mike-judge-silicon-valley/ [3] https://upload.wikimedia.org/wikipedia/commons/9/94/HP_garag...