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Money is not the limit now.
if it's not money, is it time or talent?
The limit is probably the amount of "fund-worthy" founders that exist (and apply) at any given time. If it's not that, then YCombinator batches are kept intentionally small. I would imagine so that there's a higher mentor:founder ratio, and so that all the founders form a tighter-knit group. If the groups are small enough so that everybody knows everybody, there's the "esprit de corps" that binds all together in the common goal of success. You don't want to show up to the Tuesday dinner and report no progress.
Ycombinators limiting factor is not the amount of money but the amount of time they have to spend.
And THIS.

More startups would seriously dilute the process. It would ultimately end up hurting everyone more than helping a dozen or so more founders.

+revenue -> +employees -> +funded startups
pg u down bro? i managize like a boss holla atcha boy
If they put ads on the site and bought adwords for the earned income NH would become the first economical singularity.
Assuming a bunch of us didn't ditch them for the RSS feed after the annoying ads showed up.
Presumably the ads would be in the RSS feed as well.
Given the nature of this community, if HN runs ads, I'd expect to see links to user-made alternate front-ends and ad-blocking extensions, right on the same page.
I would actually be curious to see ads from any advertiser specifically targeting the hn community. I think it's a bad idea to run on the main site, but it would be neat to have an "ads" link at the top which goes to a page of ads, maybe tailored for the individual, as an hn-user.

If they did this, hn should probably just donate the revenue to charity (like AVC does); startup-outreach-in-public-schools would be a great charity, and ultimately beneficial to yc. (pay travel expenses to have founders of startups speak at 6-12th grade schools)

What kind of silly logic is this?