How Y Combinator made it smart to trust founders

Summary

Over Kölsches at Gamescom, I was asked by a group of investors to tell the story of Humble Bundle. I recounted bootstrapping our way through Humble Indie Bundle 2, graduating from Y Combinator (W11), raising a Series A with Sequoia Capital and then after seven years and 200+ million dollars raised for charity (now $274M lifetime) we were successfully acquired by Ziff Davis who owns IGN. My colleague responded: “You raised from Sequoia and survived? They are the hardest investors to work with… known for replacing founders and growing their businesses without them if need be.”I explained that my co-founder Jeffrey Rosen and I had an amazing experience working with Sequoia. Alfred Lin (formerly CFO/COO of Zappos the company known for “Delivering Happiness”) was on our board. Alfred and his team (shout outs to Bret Reckard and Jess Lee) were the best and most founder-friendly partners we could have hoped for on our journey.I pressed my friend for more information and learned he was describing Sequoia Capital in the 90’s. What had changed in the following decade? I nearly dropped my beer as it hit me like a lighting bolt… I had lived the change.Y Combinator had reshaped the landscape.Paul Graham (no relation) and Jessica Livingston founded Y Combinator in 2005. I recommend everyone take a moment to watch Jessica’s interview above to understand the full thoughtfulness of YC’s ecosystem of trust.By the time Humble Bundle was admitted, YC had established strong momentum. Heroku had been sold in December of 2010 to Salesforce while Dropbox and AirBnB were compounding incredible growth (both were predicted to IPO, which they eventually did). Paul, noticing the trends, made the official case for founder-control as a new best-practice. On December 2010, the very month before Humble Bundle began the Winter ‘11 batch, Paul Graham penned this essay on why investors should let founders stay in charge:“I feel like we’re at a tipping point here…Founders retaining control after a seri...