I am also inclined towards option 1. That would significantly reduce the risk of not being able to pay the mortgage if things don't go well..
The downside being competitors/followers might leap ahead and I might lose this opportunity when I see some traction and consumer interest in this concept.
"I hope that you do not feel negatively about our company; one that I work on each day because I want to make it better for our users. And, if nothing else, please do not think poorly of Dan, YC, or anyone else. If you want to hate someone, please simply let it be me; I'm much better adjusted to it."
Its very clear that he is apologizing just because he is worried that his business is impacted because of what he did and not because he realizes that it was wrong thing to say.
You may down vote me for saying this but, thats what the truth of the matter is.