As you probably know, YC is taking money from Sequoia to help fund YC companies this term: http://ycombinator.com/party.html

Chris Dixon (http://www.businessinsider.com/the-problem-with-taking-seed-money-from-big-vcs-2009-10) and Venture Hacks (http://venturehacks.com/articles/options-open) put forward the following argument: Although Sequoia does not get right of first refusal, having a single VC participate in a company's seed funding can nonetheless hurt the company in the long run.

What do people think about this potential downside?