Taking the concept in a different direction: You currently have people you accept and people that you reject. You recognize that many of the people that get r

Taking the concept in a different direction: You currently have people you accept and people that you reject. You recognize that many of the people that get rejected might actually get accepted if the pool of companies you could manage could be larger. (Similar to how many people are rejected by top schools but the schools recognize that there are people that qualify but miss because of some arbitrary decision process). (After all the class size is pretty much fixed even when the applicant pool rises). So you create a third class which is, for lack of a better way to put it, "worthy runner up". Like having a silver or bronze medal. (Noting that merely even getting into the Olympics and not getting anything is worth something.) And then those rejected applicants get some of the halo of YC (which further increases the applicant pool because now it's not solely pass or fail). Plus of course further YC name branding. "While they were rejected by YC they did get a Silver medal and with that..." Anyway my intuition says that someone branded as "runner up" would do better than someone not given that status.