Startup Blog displays the post author's avatar at the top of every post and in the author box below the post content.
WordPress uses a service called Gravatar to get an avatar image associated with the user's email address. If you and/or the authors on your blog don't already have Gravatar, you can setup a free account to associate an image with the email address(es) used on your site.
If you do not want to use Gravatar, you can use the WP User Avatar plugin instead. This will add an upload button to every user's profile where a custom image can be uploaded. Startup Blog is compatible with WP User Avatar, so the new avatars will display just the same as the Gravatar images.