Reddit co-founder Alexis Ohanian leaves Initialized Capital, the investment company with which he founded in 2011 Garry Tan, as first reported by Axios and confirmed by TechCrunch. The move comes weeks after Ohanian has publicly resigned from the Reddit board and Y Combinator President Michael Seibel has taken his place.
Ohanian launched Initialized Capital Already in 2011 with a $ 7 million investment vehicle. Since then, the San Francisco-based company has grown enormously and made early bets in companies such as Flexport, Instacart, Cruise, Coinbase and Codecademy. Most recently, the company closed an investment vehicle of $ 225 million in 201
Ohanian is leaving Initialized Capital to “work on a new project that will support a generation of technology startups and beyond,” the company said in a statement to TechCrunch. According to the Axios story, Ohanian leaves Initialized to work closer to the pre-launch efforts. Initializes details on his website that many teams that he speaks to have already launched products and have a plan to generate revenue.
“We understand that products and business models are evolving, but it’s good to see in a very concrete way how teams can send products and work together,” the company wrote. When Ohanian launches a pre-seed fund, it will be interesting to see how he changes this methodology.
Ohanian did not respond directly to a request for comment.
It is worth noting that partner ventures in venture capital are rarely crystal clear separations. As initialized has confirmed, Ohanian will continue to hold a stake in the company’s existing investment vehicles and portfolio companies due to legal obligations. It is unclear whether Ohanian will stay on a board he is on. Ro, A company in which Ohanian has a seat on the board did not immediately respond to a request for comment.
A big question is whether Ohanian’s departure would trigger a key clause in the company’s limited partnership agreement. Key-man clauses, which are typical of limited partner agreements, require that certain named persons (usually the main partners of a company) remain with a company continuously and have to be active investors. When a key-man clause is triggered, limited partners often have a variety of tools ranging from controlling new hires to completely ceasing to invest in a fund to protect their investment in a fund.
In this case, it would be surprising if Alexis Ohanian was not a key man as he is a leading general partner and founder of the company.
Ohanian resigned from his daily stake in Reddit in 2018 and recently left the company’s boardroom after protesting the police brutality. The co-founder asked Reddit to fill the seat with a black board member. Reddit finally chose the Y combiner CEO Michael Seibel will fill the position.
Tan, the other founding partner of Initialized, helped YC grow from the start and helped build the famous accelerator’s internal software system and late-stage funding program. “[Tan] will continue to run Initialized Capital and find and fund great entrepreneurs like he has for nearly a decade, ”the company wrote in a statement to TechCrunch. “Garry and Alexis remain committed to each other as longstanding friends and business partners. The company fully supports Alexis in its future activities. “
Initialized Capital currently manages $ 500 million in assets and has supported over 200 companies to date.
Additional reporting from Danny Crichton.