PG has stated many times that he's investing in people just as much, if not more, than their ideas. It seems to me like part of investing is people is making sure their personal life is in order.
No, part of investing the way Graham invests is helped by caring about people's personal lives.
Don't forget, most VC funds make 1-4 investments per partner/year, invest huge sums of money, invest at a point where the business has a life beyond the founder, and require a home run return to move the dials.
Graham invests in many tens of companies per year. He invests a small amount of money. He invests at a point where there is nothing but the founder. And he's thrilled with Wufoo.
Should more firms invest the way YC does? Maybe, but remember that many YC companies depend, at the DNA level, on eventually getting an investment from a major VC.
