This week’s big news was Garry Tan heading back to Y-Combinator as President & CEO. Here’s my unsolicited thoughts on the main questions:
Why would Garry Tan do this?
Even though Garry and the team have built Initialized into one of the major seed funds, he’s often public about how much loves the Y-Combinator community, along with his admiration for Paul Graham & Jessica Livingston.
He’s a part of Y-Combinator’s DNA: founders still chant his name at events and he’s not been a partner there for years.
Lastly, working with founders at the earliest stages is a lot more fun than sitting on company boards as they scale.
What’s going to change at Y-Combinator?
Nobody knows. YC scaled to incredible levels under Sam Altman and Geoff Ralston, I don’t expect that process to stop. However, Garry is a relationship-oriented investor, whose experience with YC was back when it was much smaller.
I would expect him to have some nostalgia for those early days and perhaps we will see an expansion of the “group partners” to reduce the founder/partner ratio. We might see partners permanently located across the world to build closer relationships with international teams. I’d also expect more software aimed at building closer, remote relationships.
Won’t Initialized’s investors be upset?
Every VC I have spoken to seems to believe that Initialized’s LPs would be very upset about this situation. Many believe it will trigger a “key man” event, which might allow LPs to pull out of the fund.
I’m sure there will be *lots* of discussions with LPs but I expect they will ultimately be on board: 2 new Managing Partners were announced the same day, Initialized’s most recent funds were heavily oversubscribed and there are reports that Garry had already stepped back from some of the day-to-day operations.
