Y Combinator new Chinese president Chen Jiaxing in Web3 what layout

23-01-03 09:17
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On January 1, 2023, Garry Tan, a well-known venture capitalist in Silicon Valley, officially became the new president and CEO of Y Combinator. It is the fourth head of Y Combinator, after Paul Graham, Sam Altman and Geoff Ralston, and the only Chinese president.


Garry has also been on Forbes' Midas List for four consecutive years, and has made over 6,000 times returns on Coinbase. So in addition to being so influential in the venture capital community, what else has Garry done with Web3?



6,000x return on Coinbase


In March 2012, Garry Tan received an email from Brian Armstrong, the founder of a new startup called Bitbank: Armstrong sent him 0.05 bitcoins and described his desire to provide a convenient, legal platform for people to trade and hold bitcoins.



Garry had joined Y Combinator as a partner, and Armstrong had previously worked as an engineer at YC's star alumni company, Airbnb. While most seed-stage startups have a simple idea and go through a series of transformations, Bitbank stayed true to its original intent, only changing its name to Coinbase.


Additionally, Armstrong asks, "What advice do you have for finding a co-founder?"


Garry offers a refreshing answer: "The hardest part of finding a co-founder is that you might already know the right people, but they might be doing something else, but you have to show them why this could be or has been so much more important than anything they're doing. It's about transferring your belief in the market and the product to someone else who you know and don't know yet."


Armstrong later found another Coinbase co-founder, Fred Ehrsam. He is a gamer with a background in Wall Street finance and co-founded a crypto fund Paradigm in 2018 with former Sequoia partner Matt Huang.


By the time Garry received 0.05 bitcoins, they were worth just over 20 cents, and the total market value of bitcoins was less than $1 billion. At the time, Bitcoin was still a very marginal concept, and not many people believed in it, let alone thought it could be of any use to society, but that's why Garry was so impressed by Armstrong's project.


After reading about Bitcoin on Hacker News, Garry had tried to trade it on one possible platform: Mt. Gox. But it was a bad experience, and Garry was put off by both the bad website design and the bad process experience, so he expected more from Coinbase.



Garry and his start-up venture Capital outfit, Initialized Capital, quickly invested in Coinbase. At first, Initialized was just a side project co-invested with YC, mainly investing in startups after YC Demo Day.


First, Initialized put in $50,000 at its $9 million valuation cap, followed by another $50,000 at its $12 million valuation. The following January, as Bitcoin prices soared to the then-eye-popping $20 a coin, Garry and Initialized poured in another $200,000. Coinbase has since been valued at more than $100 billion, which has earned Garry a 6,000x return, and he has repeatedly said it was the best investment he ever made.


Initialized Capital's crypto portfolio


Initialized Capital is a diversified venture capital firm founded in 2011, headquartered in San Francisco and co-founded by Garry Tan, Alexis Ohanian and Harjeet Taggar.



It's worth noting that Alexis Ohanian is also the co-founder of Reddit. By 2020, he had resigned from Reddit and left Initialized Capital, then founded another venture capital outfit, Seven Seven Six (776), and accelerated the layout of Web3.


Less than a year later, 776 partnered with Solana Labs on a $100 million blockchain investment plan. Ohanian is also married to former world No. 1 and 23-time Grand Slam winner Serena Williams (commonly known as "Serena").


Initialized Capital has raised over $3.2 billion in assets as of 2021, having completed six rounds of funding from the $7 million raised in the first fund to the $700 million raised in December 2021. Initialized has invested in a total of 175 companies and captured 28 unicorns. Including Coinbase, Ava Labs, CoinTracker, Reddit, Cruise Automation, Instacart, Flexport and many more.


Back to the crypto field and Web3, what layout is Initialized Capital in addition to Coinbase? BlockBeats has sorted out the following:



It can be seen that, as a diversified venture Capital institution, Initialized Capital also has a wide layout in Crypto/Web3. It not only invested in CEX, a number of crypto financial service providers, public chain and some industry infrastructure, It also includes popular tracks such as DeFi, NFT, Chain Tour and DAO, which have emerged in the last two years.


In terms of the number, the Crypto/Web3 projects invested by Initialized reached 18, more than 10% of the total portfolio. These include Coinbase, Polychain Capital, Ava Labs, TRM Labs, Horizon, Alliance DAO and other well-known projects.


And when Garry takes over Y Combinator's new president and CEO, he'll be stepping down from his full-time position at Initialized Capital. Going forward, Initialized will be led by Managing partners Jen Wolf and Brett Gibson. They've both been Garry's longtime collaborators: Jen was Garry's boss early in his career, and Brett co-founded Posterous, Garry's early startup.


As the former COO of Initialized, Jen has been responsible for managing day-to-day operations, building most of the team and keeping partner applications open since her appointment in 2016. About 50% of the investment team is made up of women, as is 80% of Initialized's leadership. Initialized was named one of The most diverse companies in a research project conducted by The Information, and Garry attributed most of the credit to Jen's hard work.


From left to right: Garry Tan, Jen Wolf and Brett Gibson


Garry Tan's entrepreneurial journey


Garry Tan graduated from Stanford University in 2003 with a bachelor's degree in computer systems engineering and worked as an engineer at Microsoft for two years. Around that time, a friend invited him to dinner at a dinner party organized by Peter Thiel, who sent him a cordial invitation and a check for $200 million in equity to quit Microsoft and join Palantir, a big data company.


That year, Peter Thiel, who had already become a billionaire by investing in PayPal, co-founded Palantir. Palantir is an American software and services company headquartered in Denver. It is famous for big data analysis. Its main clients are government agencies and financial institutions.


At the time, Peter Thiel thought Garry was wasting his time working at Microsoft. However, Garry said that he had just graduated from college and knew nothing about entrepreneurship and finance. At least Microsoft was a technology giant and could get a promotion and a raise if he stayed for another year. So he turned down the offer of $200 million in equity. But that turned out not to be a smart decision, and at one point Palantir was worth more than $20 billion. Although Garry later joined the company as Employee 10, the lesson stuck with him.



In 2008, Garry started his own business and co-founded Posterous, a blog that enables integration and automatic publishing to other social media tools such as Flickr, Twitter, and Facebook. That year, Posterous was selected to Y Combinator's Summer Batch program and was later acquired by Twitter for $20 million.


At the end of 2010, Garry joined Y Combinator as a partner and was a resident designer until he left in 2015. During his five years at YC, Garry helped compile a directory of the "best and brightest interaction designers and visual designers" and also found time to build some of the core in-house software that YC still uses today, including Bookface.


After leaving Y Combinator, Garry focused on Initialized Capital, the venture capital fund he co-founded in 2011 with Alexis Ohanian and Harjeet Taggar. Garry said he sees a significant opportunity at YC to make a positive change in the startup ecosystem and serve this community by bringing his experience there that will ultimately help early-stage technology and founders everywhere. "Initialized and YC are very much the same: YC made me, I made Initialized." Garry once said.



Garry is now back at YC as its new president and CEO. Data from YC Startup Directory shows that the number of YC S22 projects in 2022 is reduced by about 40% compared with the last batch, but Crypto/Web3 projects are increasing year by year. It can be seen that investing in Web3 has become an irreversible trend. Therefore, with Garry's rich experience in Crypto/Web3 investment, YC will accelerate the layout of Web3 in the future under his guidance.


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