“Today’s news comes at an interesting time. Last week, Business Insider’s Jonathan Marino reported that YC is close to raising several billion dollars for a new fund, with the goal of possibly expanding its scope to later stage funding. It said it’s still in preliminary discussions for this new strategy, but if true, Thiel could definitely play a big role there.”

My recollection was Thiel was injecting cash, a money deal. [0] There was another less advertised play. An established path for the Thiel “Boy Wonder Fellows”. [1]

“In addition to founding PayPal and Palantir and being the first investor in Facebook, Peter has been involved with many of the most important technology companies of the last 15 years, both personally and through Founders Fund, and the founders of those companies will generally tell you he has been their best source of strategic advice. He already works with a number of YC companies, and we’re very happy he’ll be working with more.”

Guess who was involved in the Thiel / YC deal? [2] You are not the only one seeing this as a reputation hit for YC. [3] Even I, disconnected across the other side of the world could see this as an issue.

[0] https://www.inc.com/business-insider/peter-thiel-is-joining-...

[1] https://boingboing.net/2016/08/25/peter-thiel-y-combinator-f...

[2] https://www.ycombinator.com/blog/welcome-peter/

[3] https://qz.com/810778/y-combinator-has-no-problem-with-partn...

Having Thiel on board of YC would probably turn off a lot of potentially successful founders. Or maybe it's a way to select for those with a lack of ethics. Having Musk and Thiel visibly associated probably is good from a monetary perspective but it sends all kinds of bad signals.