I said in the past I would have paid to get funded by YCombinator. I gave four reasons and today Paul Graham is explaining all of this beautifully. YCombinator is really a new kind of business.
In fact I think they have to exchange a part of the company they are funding for cash just to legitimize themselves. What I mean is they could just take 3-6% of a company in exchange for the right to participate in their 3 months program. Today I think it would work, but in the beginning there would have been resistance. Even today they probably don’t want to cut the number of applications by going to a moneyless model. I still think it would be worthwhile.