[staunch]

I think the main reason 500 could work even without home runs is that they do follow on investments in the most promising companies. YC doesn't do that because it would screw every company they didn't follow on in at Demo Day.

It would also probably result in less home runs if they did this because (as PG stated) the very most promising ideas already often have the hardest time at Demo Day (Fred Wilson + Airbnb).

500 startups may actually be strangling their home runs in the crib with the follow on strategy. A self-fulfilling prophecy.