1. Anybody can apply, from anywhere, and you apply online. Good luck finding an online application for a normal VC, and cold-emailing partners isn't going to get you anywhere. Oh, and if you don't live in the bay area your chances just went way down of getting a meeting or investment.
2. They give you a nice chunk of money in exchange for a really tiny amount of common stock (I think it's common stock), have really nice terms, and don't take a board seat. I'm sure for many of the companies that apply, YC could take much more equity but they don't (and it would still be worth it for the companies anyway). They are paranoid about and lose a ton of money by restricting partners investing or taking their pro-rata rights to protect the companies they don't follow on with (this is my understanding of their policies).
3. They keep increasing their class sizes in attempts to get more people going through it. They created an online class that they offered for free to everybody to encourage more people to do startups and spread the knowledge.
4. They have a means of preventing and responding to investor misbehavior by threatening to blacklist them from YC companies. This is hugely valuable for your average entrepreneur as its helps to shift the culture in a way that is better for entrepreneurs (which has happened a lot in the past few years).
They aren't perfect. They don't claim to be perfect (case in point: the title of this blog post). But believe me, they are miles away from a traditional VC.
I think we both agree that: YC is becoming more like everyone else in the investing game. they want to make a lot of money.
Just to clarify, it felt like YC used to be more different from others in the investing game, like they cared more, or they were willing to invest in earlier-stage startups, or they had a higher purpose, or followed the hacker ethos. but now it just feels like they're more like every other investor out there -- please note the use of the word "more". they still do great things (watsi case in point), and all of their blog posts are very respectful towards applicants. to reiterate, it just feels like they're becoming "more" like traditional VC and less like what I thought YC was or used to stand for.