Founders at Work.pdf

C H A P T E R
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Jessica Livingston
Cofounder, Y Combinator
Jessica Livingston founded Y Combinator in 2005 with Paul Graham, Robert
Morris, and Trevor Blackwell. Y Combinator developed a new approach to venture
funding: to fund startups in batches, giving them just enough money to get
started, working closely with them to refine their ideas, and then introducing
them to later stage investors for further funding. In three years they have
funded more than 100 startups.
When did you start Y Combinator?
Livingston: We started Y Combinator in March 2005. Around that same time, I
had gotten a book deal for Founders at Work, so I had planned to quit my job
doing marketing at an investment bank and work full-time for a little while on
the book. But we started Y Combinator simultaneously, so I didn’t really get to
spend much time on the book.
What was the process when Y Combinator got started?
Livingston: That would assume that we had a process. There was no process.
Remember, Y Combinator started off as an experiment. Paul had wanted to do
angel investing. He wanted to help people start companies. But he didn’t really
want all the requirements that come with being an angel investor, so he thought
he should start an organization that could handle all of this for him. I said, “That
sounds interesting. I’d love to work with entrepreneurs.” So we sort of hatched
this idea for Y Combinator, and I was the one in charge of doing a lot of the
business stuff.
We decided to do a batch of investments at once, so that we could learn how
to be investors. We decided, “OK, we’ll invest in a group of startups, and we’ll
do it over the summer since a lot of people are free over the summertime.”
How did the summer turn out?
Livingston: A lot better than we’d have ever thought. Not that I went into
things with a whole lot of expectations. The idea with Y Combinator was that we
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