Y Combinator has tapped an outsider as its next president — sort of.

The storied Bay Area-based accelerator has chosen venture capitalist and Y Combinator alum Garry Tan to serve as the fourth leader in its seventeen-year history. Come January, Tan will replace president Geoff Ralston, who took the mantle in 2019.

“This is a community where people’s dreams, more or less, are fulfilled in a lot of ways,” Tan tells Forbes in an exclusive interview. “The chance to come back and help make that happen is a one in 10 billion lifetimes kind of thing.”

When he takes over the top job at Y Combinator, Tan will step away from a full-time role at Initialized Capital, the firm he created with Reddit cofounder Alexis Ohanian in 2012. An early investor in cryptocurrency exchange Coinbase, grocery delivery service Instacart and supply chain software unicorn Flexport, Tan has appeared on the Forbes Midas List for the past four years, most recently ranking at No. 28. He debuted at No. 4 on the inaugural Forbes Midas Seed List in 2022.

By selecting Tan to lead YC, the accelerator’s board brings one of its most prominent alumni back into the fold. Tan and Ohanian started investing as Initialized in 2011 while still partners at YC, before stepping away to focus on the firm full time. (Ohanian later departed to launch a new VC firm, Seven Seven Six, last year.) But Tan’s ties to the accelerator have remained deep: the internal directory he built, cheekily called Bookface, remains a key piece of the network that YC offers its entrepreneurs.

“I have never stopped thinking of Garry as part of YC,” outgoing president Ralston tells Forbes. “It feels like he’s coming home.”

Tan will begin leading Y Combinator at a transitional moment for the accelerator, among the world’s largest and most influential with alumni including home rental service Airbnb, payments leader Stripe and online collaboration company Dropbox. Founded in 2005 by married couple Paul Graham and Jessica Livingston and two others in Cambridge, Mass., Y Combinator moved to the Bay Area and became synonymous with the start-up scene in Silicon Valley in the decade that followed. Its semi-annual “batches,” three-month programs in which companies work closely together and with YC partners, advisers and alumni before presenting to investors and journalists as part of a Demo Day, carry a typical 1.5% to 2% acceptance rate, according to its website. YC has funded more than 3,500 companies to date, and 80 “unicorns” valued at $1 billion or more.

Geoff Ralston will leave Y Combinator after the transition to Tan as president is complete.Gary Sexton

Under Graham’s successor Sam Altman and then Ralston, Y Combinator underwent a period of rapid expansion that has both expanded its reach and its notoriety in the tech ecosystem. YC now expects to invest $500,000 in participating companies, in exchange for at least 7% equity and potentially much more, depending on a company’s later funding rounds. In 2021, even as YC went fully remote in response to the Covid-19 pandemic, it funded 750 companies, a Y Combinator record. Ralston made headlines in December 2021, when he told the Newcomer blog he envisioned a path to funding 1,000 startups per batch.

This past summer, however, Y Combinator downsized its summer batch by 40%. Other YC initiatives, such as onetime plans to move the accelerator’s headquarters from Mountain View, Calif. to San Francisco, have been quietly abandoned.

In separate interviews, Tan and Ralston take a line popular with current and former YC staff: that doubts about YC getting too big, or “jumping the shark,” are nearly as old as the accelerator itself. They both say they feel confident that the engineer-led ethos of the organization will always drive it to experiment unabashedly on behalf of its entrepreneurs. “I don’t know whether there’ll be batches of 1,000 in the near term, but I believe that potential exists out there,” Ralston says. “We’re a big world.”

Once Tan has fully taken over leadership duties, Ralston plans to move on from Y Combinator, he says; there are no plans for him to remain as chairman as Altman had initially been expected to do. Ralston hopes his three-year-plus legacy at the accelerator to be remembered as one of stability, a time when the program’s long-term future solidified into something more akin to an academic institution like Stanford University. “I made changes in the direction that Sam was going, and I suspect that it will be [that way] with Garry as well,” he says.

Initialized Capital’s Jen WolfCourtesy of Initialized Capital

In his absence, Tan’s VC firm Initialized will be led by managing partners Jen Wolf and Brett Gibson moving forward. Both are longtime collaborators of Tan’s: Wolf was Tan’s boss before he applied to Y Combinator early in his career; Gibson was Tan’s cofounder in Posterous, the company with which he applied. In an interview, Wolf says she was already managing day-to-day operations at Initialized for the past year as its president. The firm will continue under the same branding and remaining partnership, she adds.

“Garry’s not zero sum in his views on the world, or managing people. Someone doesn’t have to lose for someone else to win,” says Wolf. “He wouldn’t do this if he didn’t think we were ready.”

Still, it’s a surprise move for Tan, who last year told Forbes in a profile that his early investment success gave him “a golden ticket” to build Initialized into a lasting institution in venture capital. (In an interview last week, Tan quoted the same 2021 article back to Forbes, noting that he’d said then that he hoped to build a firm that would outlast its founders.)

Capital is abundant, Tan argues; opportunity for entrepreneurs, less so. He invokes his own personal story, growing up, he says, in the East Bay food insecure, and learning to code to make web pages to help his parents make a down payment on a house.

“YC is a beacon where you don’t have to know anyone,” Tan says. “People gave me so much, taught me so much, and I need to give back.”