Garry Tan is a founder and managing partner at Initialized Capital.
Initialized Capital
Initialized Capital founding partner Garry Tan is taking over as the CEO of Y Combinator.
A 2008 Y Combinator founder himself, Tan served as a YC partner from 2010 to 2015.
Partners Jen Wolf and Brett Gibson will take over for Tan as managing partners, Initialized said.
Garry Tan, the early-stage investor who founded Initialized Capital, will be taking over for Geoff Ralston as the president and CEO of Y Combinator in early 2023. Both Initialized Capital and Y Combinator shared the news in their own blog posts this morning.
“My goal has been to cement YC as an institution that will endure for decades,” Ralston wrote, announcing his decision to step down. “Garry, the visionary hacker, designer, and builder who has described how YC is ‘engraved on his heart’ believes in this future and is precisely the right person to take over as YC’s chief executive.”
“It’s a one in ten billion lifetimes kind of opportunity,” Tan said in a tweet this morning. “YC gave me my start, and I’m deeply grateful to the community.”
The tech community weighs in
Many of Tan’s contemporaries such as Paul Graham and Alexis Ohanian, who founded Initialized with Tan, shared their congratulations on Twitter. VCs also weighed in on what the move means for the storied accelerator.
“Because he’s been in the community for so many years as a trusted advisor and friend to so many, he has the entire community’s support,” Avichal Garg, the managing partner at seed fund Electric Capital, told Insider.
Tan’s new appointment as CEO could be the publicity boost that YC needs, some VCs have speculated.
“It felt like the brand was waning a bit,” Sheel Monhot, a general partner at the early-stage firm Better Tomorrow Ventures, told Insider. “If you asked most people who was the leader of YC they may not have even known, so I think Garry can really turn it around.”
Tan is no stranger to Y Combinator. He went through the famous startup accelerator with his blogging platform Posterous in the Summer of 2008, and served as a YC partner from 2010 to 2015.
After cofounding Initialized with Ohanian and YC group partner Harjeet Taggar in 2011, Tan grew the firm into a massive $3.2 billion fund that has backed unicorn startups like Instacart and Patreon.
He’s also a well-known “VC pundit,” with a YouTube channel where he discusses insights into his career and early stage investing. The channel has amassed more than 220,000 followers.
The announcement comes as Y Combinator gears up for its Summer 2022 Demo Day, where the latest cohort reveals what they’ve been building over the last three months. The Summer 2022 class size was slashed by around 40 percent compared to the Winter 2022 batch, the Information previously reported earlier this month.
The impact on Initialized
A spokesperson for Initialized Capital shared in a statement that partners Jen Wolf and Brett Gibson will be taking over for Tan as managing partners for the $3.2 billion fund. Wolf will continue to lead Initialized’s general operations and Gibson will lead the firm’s investment strategy.
“I’ve known Jen and Brett in aggregate longer than I’ve been alive,” Tan said in a blog post. “They are both incredible leaders who have elevated themselves over time, founders love them, and they are world-class, high-integrity investors who have shepherded billion-dollar startups. I have the utmost respect for and confidence in them.”
It’s less clear how Tan’s new role will affect Initialized’s brand, however. The firm already lost one well-known founder when Ohanian stepped aside to start a new fund, Seven Seven Six, in 2020. On Twitter, some have asked if Tan’s successors can replace his star power.
“I hadn’t heard of either of the partners they named as successors,” Monhot said.
Most venture firms have a restriction in their agreements with the limited partners who back them called a “key-man provision.” This provision stipulates that if a prominent partner leaves the firm or becomes less active, the limited partner no longer has to pony up the capital it committed. After Ohanian left, a firm spokesperson told TechCrunch‘s Natasha Mascarenhas that Ohanian did not trigger such a clause in his departure.
Initialized declined to say if a key-man provision exists for Tan, while a person familiar with the inner workings of the firm told Insider in an email that Initialized is in “close contact” with its limited partners on the transition.