Khosla Ventures Replaces Yuri Milner In Y Combinator’s YC VC Program

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Khosla Ventures is joining Y Combinator’s YC VC program, which provides $80,000 to each startup that goes through the seed stage accelerator. According to a Y Combinator blog post, the firm will be taking the place of Yuri Milner, who is spending less time doing seed-stage investments.

Khosla Ventures has already invested in a number of Y Combinator companies, including TightDB, Instacart, and Quartzy. But by becoming an investor in the YC VC program, the firm will get early access to companies alongside other firms that participate, including Andreessen Horowitz, General Catalyst, and Maverick Capital.

Under the structure of the program, each investor puts $20,000 into each Y Combinator startup. As part of YC VC, partners at the investment firms have also been asked to hold office hours at Y Combinator.

The YC VC Program is a successor to Y Combinator’s Start Fund, which was originally set up by Milner and SV Angel and gave $150,000 to each company in the accelerator. When Y Combinator moved to the YC VC model, it reduced the amount of money that the startups got, and added Maverick Capital as an investor.

At the time, Y Combinator said it found that $150,000 was too much to offer as part of the program:

“$150k was more than the successful startups needed, and it sometimes caused messy disputes in the unsuccessful ones. Switching from $150k to $80k may not completely eliminate such problems, but it will make them at most half as bad.”

As an interesting side note, the news comes about a year after Vinod Khosla himself said that he felt sad for Y Combinator companies that “get so much hype that they get valuations that no one who will help the team are going to pay.” Presumably having his firm’s partners get in on the ground floor and be able to provide personal attention and guidance to startups through office hours might help some YC companies avoid those pitfalls.

Check out the Vinod Khosla interview below:

Photo Credit: Paul Miller via Compfight cc