When we were building nderground.net we also applied to Y-Combinator. We did not make it to the interview phase, so congratulations on doing so.

There are a few ways to get Y-Combinator funding. One is to have something that is starting to look successful (e.g., increasing numbers of users, revenue, etc). You don't necessarily have to give up your day job to build your business. If the business is showing some success you have a reasonable chance of Y-Combinator funding.

Most start-ups are going to fail. The most common reason for failure is lack of product/market fit (this is where nderground.net failed). By "going all in" and giving up your income source you will lose a lot of money if your startup fails. So I would not encourage people to give up their day job until it looks like they have some product/market fit that exists outside of their imagination.