Despite relatively few exits and a large number of overall companies funded, what we have seen is that YC isn't all that far away from getting a positive return

Despite relatively few exits and a large number of overall companies funded, what we have seen is that YC isn't all that far away from getting a positive return on their seed investments, a few mid sized exits or even one facebook like company and the whole thing is a roaring financial success. I think this will ensure seed funding stays strong, the risk is relatively small with a large potential payoff with only a small fraction of companies making it big. As opposed to say a $5 million dollar VC deal which has a much larger risk attached.