1. AH could offer $50k on the same terms if they wanted, and most companies would probably take it. It's not like Yuri/Ron have any exclusivity arrangement.

2. YC classes have grown in size a lot. It's probably a bit more expensive than they planned, so they don't mind sharing the load.

3. Having AH as a partner helps the startups, which means they're more likely to succeed (hopefully).

1. Then why did they need to negotiate to be a part of Start Fund, surely they could offer a separate, secondary deal of $50k to each YC company

2. This is highly plausible and sounding to me like the most likely reason

3. Absolutely, I'm just trying to understand why its as 1/3rd of Start Fund instead of offering their own deal

Syndication diversifies and mitigates risk. You're adding a third pro to the mix, so you're more likely to have a proper solution to any given problem.

Are Ron and Yuri then admitting worry about the outcome of these deals? If they see the need to mitigate risk to a 3rd party (to the extent of giving away 1/3rd of the potential outcome), it seems they may be unsure of the bets they placed with Start Fund.

Help me understand the thinking here...

You don't need worry to start reducing risk. Any smart investor will lower risk as much as they can. If they're worried about their total investments, they would simply offer more (the same) investment as before.

If they're lowering amount/group in favor of number of groups, it probably means it makes more financial feasibility to do so.

Edit: Also realize that the initial investment also acts as a doorway for them to enter future larger deals, if they so wish. Shifting from a 75k investment to a 50k investment means they increase their opportunity without really sacrificing good will on the founders' part.