Incorporation is basically free because YC does it in bulk, and uses their own in-house lawyer for it. Equipment is free because all you really need is your ow

Incorporation is basically free because YC does it in bulk, and uses their own in-house lawyer for it. Equipment is free because all you really need is your own laptop and Amazon EC2. YC companies are usually started by hackers who don't outsource graphic design, or if they do they do it cheaply because they do much of the implementation themselves. The $20k goes mostly to living expenses for the summer. You're expected to raies further capital after that. (As a side note, thanks to Yuri Milner and StartFund, you now get easy access to an additional $150k, but I can say from experience that's far from necessary)