Pretty interesting move. Great for founders raising seed rounds after YC. Great for YC. Not sure if it's as great for founders who want to raise a little at a pre-seed price (e.g. $1m at $10m post) because now there's $375k extra converting at whatever valuation you raise at.
If you wanted to raise $1m at $10m post, well, you already have the $375k, so you can just raise $625k at 10m post now and your outcome is the same as the prior YC arrangement.
