Context : https://news.ycombinator.com/item?id=13921433 and https://news.ycombinator.com/item?id=13142327
Working on side projects that could turn into a business (includes potentially applying for YC) while still employed is a grey area. I think YC should take the natural next step of having all their portfolio companies adopt something like the Github IP agreement and that will instantly make YC companies way more attractive to work for.
Keep it simple : allow employees to work on their side projects on their own time using their own resources and as long as it's not directly competing, it's all good. This seems to be the implicit understanding already, but make it formal. Work at a Startup team at YC, what do you think?