Y Combinator’s Next Chief, Garry Tan, Is Open to Expansion

Y Combinator, the technology industry’s most prestigious business incubator, appointed venture capitalist Garry Tan as its new head. 

Tan, who will be the first Asian American in the role, will take over early next year as president and chief executive officer from Geoff Ralston, 61, who ran the firm since 2019. 

Tan said he’ll wait until he arrives to make plans for Y Combinator, but will entertain the idea of expanding the program. “The value of any network is the square of its nodes,” he said. “If you hold quality constant while increasing the size, that creates a situation where the value of the network multiplies.”

This will be Tan’s second tour of duty at Y Combinator, where he worked as partner until 2015, building the VC firm Initialized Capital at the same time. Tan will leave Initialized Capital, which he co-founded with Reddit’s Alexis Ohanian in 2011. Ohanian departed in 2020 and became a prominent crypto investor.

Initialized said Monday that it promoted two partners, Jen Wolf and Brett Gibson, to managing partners who will help oversee the transition.

Tan compared running the VC firm -- which has invested in COINBASE Global Inc., Instacart Inc. and Flexport Inc. among others -- to a video game, and said his departure wouldn’t derail the endeavor. “It’s not about the founders doing a single player game,” he said. “This is a massively multiplayer game.”

Initialized raised $700 million at the end of last year. Usually funds and their investors agree that key managers will stay in place for a new fund, a legal provision known as a key man clause. When asked whether investors in Initialized had raised concerns or if the move would trigger a key man clause, Tan said the firm was “working through it.”

Initialized’s 2016 vintage fund has 10 startups worth more than $1 billion, a spokesperson said, an unusually high number of so-called unicorns. Across its six funds, Initialized has 28 unicorns.

Y Combinator was started in 2005, offering teams of aspiring tech entrepreneurs access to investors, advice and seed funding to get their ideas off the ground. Airbnb Inc.Dropbox Inc. got their starts there. Co-founder Paul Graham became a business guru, a role he still plays on Twitter

In 2014, Graham named Sam Altman, the current CEO of OpenAI, as his successor, a role he maintained for five years. After Altman, most of Ralston’s tenure at Y Combinator took place during the Covid-19 pandemic and required major adjustments to the program, which traditionally relies on in-person workshops.

In June, Y Combinator announced a return to in-person offerings. It has said it accepts about 2% of the companies that apply, making it more selective than the US’s most prestigious universities.