There are countless ways that government connections could be very useful if you're trying to ensure the success of portfolio companies, especially if they're operating on regulatory frontiers.

Nudging policymakers in a favorable direction on legislation that could effect your portfolio is the most obvious, but there are tons of other examples as well.

I'm not arguing that this is a primary driver of YC's success (I don't know the extent, if any, of their government influence), but you'd be silly to think that political connections can't benefit an investor.