I'd speculate that YC is perfectly happy to see startups succeed, even if they weren't one of the teams that they selected. I'm skeptical they give much thought to rejecting anyone.

I'm always happy to see people succeed, especially people I fired at one point. The beautiful thing about our field is that it isn't a zero sum game.

EDIT: none of the successful people I know spend time on regret

It's not that they would be disappointed that the team succeeded, it's that they would be disappointed they didn't invest in them.

Yes, that's probably a better formulation of the question.

I wonder if YC already tracks this, maybe informally? It would be a good means of testing their own selection processes. Then again, they probably focus more on the "false positives" (YC startups that did poorly) than "false negatives" (the ones that got away).

Startup returns usually follow a power law. That means a missed good investment is potentially hundred times worse than a accepted bad investment. A single good investment like Heroku, Dropbox or Airbnb can easily outweight all other investments combined.

Obviously they don't want to accept just anyone, that doesn't work for various signal, scale, attention and effectiveness reasons. They do however accept (positive) outliers without traditional credentials, which is the opposite of what a traditional company does. A traditional company is looking for safety, VCs and YC are looking for maximum leverage (not the typical financial two-fat-tails kind, the only-upsides kind that Nassim Taleb et al. likes).

As for your question, I can't imagine a reality where they don't track that sort of thing.

Maybe YC and pg doesn't have regrets. At least not any regrets like that. I don't think I would.