As an investor, if YC contacts me with a "great investment opportunity" and does not invest themselves even tho I know they could have, the investment better be successful. Because otherwise, I will feel cheated on. "Do as I say, not as I do" type of relationship is not exactly what I am looking for.

In the previous system, they had skin in the game, they literally were putting money where their mouth was: same companies, same valuation. If I make money they make money, if I lose money, so do they. You can't beat that.