This is good for YC startups in the long run. When you're out raising a series A, you really don't want the negative signals when Horowitz or Khosla decide to pass.
This can't really be a problem. These firms spend so little time with the startups and invest in ~70 each batch, that them not investing signals almost nothing.
^ This. It is roughly the equivalent of them never investing in your seed round, and then again passing on your A round. That is a signal, just not a strong one of any sort.
Where signaling may seem off is when they invest 500k in your seed, and then don't invest in your A. They were heavily committed and liked your company, and then for some reason lost interest in investing any more.
