[chanri]

Could someone help me run the numbers? What will $150,000 be used for on an average YC startup?

$150,000 will allow the startup to hire 1 or 2 engineers in the short-term. Is that the real use of the $150,000?

What other expenses do they spend good money on?

Another way to look at this question: If you were a new startup in YC, what would you spend the 150,000 on?

[Timothee]

One thing it can buy is time, and consequently leverage.

At Demo Day, the investors will know that all the startups have some cash to last after YC, so that they don't have to rush on the first investor that comes along which should translate to better terms for the founders. Or it could just allow them to look for investors a bit later on, hopefully providing them with a better negotiating position by having a product further along or gain some traction before needing the money.

[krisrak]

hiring engineers is not a good idea, your startup team should have enough talent to do 90% of the work. Some use of the money could be for design art work, or marketing (free swag). For example if you were planning to launch your startup on iPhone only, you can now use the money to contract someone to develop for Android, WP7, blackberry, this money can make the startup more complete at launch.

[jaxn]

uh, wouldn't that be "hiring engineers"?

Or do you want the designers to build the blackberry app?

I think spending it on swag would be a horrible idea. I can't think of any company that succeeded because they had really great swag in the early months.

[krisrak]

I meant not hire full time engineers, $150 can only get u 2 engineers, get a app done on contract basis.

[cachemoney]

Runway

[chanri]

What do you mean by runway?

[Mz]

Scroll down to point 11:

http://www.paulgraham.com/startupmistakes.html

[md3]

founder salaries

[jaxn]

I.e. taking some of the "feed the family" money off the table.

This could open YC to entrepreneurs who can't live on ramen because they have families.