Though the big hit makes the major returns, doesn't the one small hit per session cover the operating expenses? (Reddit, Zenter, 280North, etc. etc.)
I think this is what the original post might be missing. The top incubator(s) can patiently wait for the big hits, as long as they've got 1-in-20(ish) small hits to keep them in the black.
You can't count on that, because acquisitions are so unpredictable. In bad times they dry up entirely. YC was not in the black till December 2010, more than 5 years after we started.
Sounds like it was Heroku's $212 million sale to Salesforce that pushed YC into the black. Though, I imagine if you also include on paper gains, you were in the black much earlier.
I think this is what the original post might be missing. The top incubator(s) can patiently wait for the big hits, as long as they've got 1-in-20(ish) small hits to keep them in the black.