Wages are relatively high where I live but there is no VC, so YC wasn't quite the right fit before where now it could work quite well.
With 125k it would have just been me and maybe a cofounder working for about a year or two, I wouldn't need all 125k for myself but I also couldn't hire anyone extra with 125k. I would be happy with that, but it wouldn't be the best outcome possible. At 500k hiring someone is now very possible, it's a huge increase, and another soul on board is a huge win.
With 125k it would have just been me and maybe a cofounder working for about a year or two, I wouldn't need all 125k for myself but I also couldn't hire anyone extra with 125k. I would be happy with that, but it wouldn't be the best outcome possible. At 500k hiring someone is now very possible, it's a huge increase, and another soul on board is a huge win.