I took the liberty of taking notes. They're my impressions of what Jessica is saying rather than a transcription. All errors in interpretation are mine:

Jessica really likes Adora Cheung of Homejoy for having a very inspiring narrative. (No specifics in this interview.)

First YC class: 8 companies, 400+ applications.

"We have to do this in Silicon Valley [rather than Cambridge] because we didn't want someone else to become the YC of Silicon Valley." (Echoes the "Uber will be the cheap Uber" line.)

@8:25 "No no no, I know you can make templated legal documents and just fill them in." Mass-customized processes let them accomplish e.g. incorporation for less than $15k per company.

Ron Conway brushed me off 3 times. We couldn't describe ourselves as an accelerator because that concept didn't exist yet. Despite the brushoffs he was eventually convinced by multiple people in his network convincing him, so he came to Demo Day and the concept of YC then made a lot of sense to him.

"What's changed w/r/t YC applications over the years?" The Social Network / Facebook IPO caused a large spike in startups generally, but it's been on an uptrend steadily for the duration. Quality is harder to measure. We get companies which are much later stage (existing product, signs of traction, evident ability to raise professional money) than the no-prototype folks who usually applied earlier.

"Could YC 2x/3x in size?" We're interested in scaling but don't know the specifics of how to do so at the moment. Number of startups will only increase; it is a fundamental shift in the economy. YC's early stage makes it incredibly difficult to accurately predict winners -- who would have called AirBNB and Dropbox [as turning into billion dollar businesses]?

"You knew Drew was going to be successful with a 1600 SAT." Many smart people apply to YC, but that doesn't guarantee you get in. Mere intelligence doesn't make startups succeed. Not that went to MIT is a bad predictor of success but it is certainly no guarantee.

"Where are the international entrepreneurs coming from?" International increasing mainstream-ness of startups. Not just from UK/Canada, but from (non-Anglosphere) countries as well. I don't have an explanation other than more people are doing startups.

"Are international companies solving different problems?" Not really. Most foreign firms are solving problems which US companies could equally address; global problems.

"How do visas work?" It is a 'bad situation.' Unlike US founders they don't have the option of remaining in SV after YC ends. The visa application process is 'broken and horrible.' We as entrepreneurs/folks in the community should actively attempt to make this situation easier; in addition to it being the right thing to do, it makes it easier to recruit people from abroad.

"You're known for having a good people radar. What are the red flags you see prior to a cofounder problem?" JL is not technical so she looks for other things in their 10 minute interview. Do founders get along? Don't fight in front of us. Do they have a good vibe between them? Don't interrupt your co-founder aggressively. Do they understand their domain well? If they're a B2C company, I ask to see if they've thought deeply about consumer needs. Defensiveness is not a good trait. We want to work with people who will have enjoyable conversations with us, not people who get angry.

Trivia: YC decisions are made immediately after the 10 minute interview, in the room. We do 20 interviews a day and would otherwise forget.

Red flag: 90/10 equity split between founders. Even with 1+ years extra in the company, as time goes to infinity you will have equal mental investment, and 90/10 will cause terrible resentment.

JL: "I am an expert in founder breakups." Warning signs: joining as co-founder purely for the purpose of a YC application. It has been known to work but that is often a bad sign. You might not know each other or have good working relationship, and that will crack in the YC stress crucible. I like seeing college roommates or 5-year coworkers apply. They're going to have better working relationship and ability to overcome issues.

Regarding the new policy about YC partners investing in startups: This is a pro-startup move. In past Paul or Paul would invest in the occasional startup, which was OK for a few years, but these days Gary Tan et al have funds, and the pre-Demo Day investment from partners was causing signaling issues. Companies w/o partner investment were being seen as losers. We nixed this to protect interest of the startups.

YC applauds partners who have funds orthogonal to YC: more funding opportunities for startups, yay.

YC funding non-profits after success with the Watsi experiment.

Current YC batch is more diverse than typical. 56 year old founder (oldest ever), father-son team, more international founders, more female founders, etc. (Moderator seems to think the 56 year old is quite the outlier.)

Q&A with the audience @ 32:00:

Q1: To JL/PG: How did you build the community of alumni even though some compete with their individual companies?

Fundamental to roots of YC and the community culture. If you help someone, someone will help you. People who do not behave within community norms are shunned very quickly. Moderator adds that the community is tight-knit and doesn't leak very often. JL says they try to have batches intermingle. Secrecy/etc is not an Applesque strategy -- the founders are probably just too busy running companies to run mouths.

Example of YC alumni network helping: Bump got substantial promotion from Apple. Servers melted. Founder of Cloudkick jumps in within 15 minutes, goes to house to fix servers. "That's the power of the YC community. sustained spontaneous applause"

Q2: How can red-blooded capitalists and non-profit companies learn from each other?

Non-profits can apply tactics like moving-fast-and-breaking things, launching early, and listening to users. Historically nonprofits tend to be bureaucratic and antiquated. We hope that if they become more startup-y they'll be more successful at advancing missions to the benefit of the wider world.

For-profit companies support Watsi in many ways; very special.

Q3 (moderator): Founders at Work most impactful real book on what it is like to be an entrepreneur. JL wants to write a sequel. Founder of Mosy (sp?) recommended FaW when discouraging the moderator from pursuing his startup idea, which that founder described as doomed, in favor of founding a successful next company, which FaW would help with.