1
00:00:00,000 --> 00:00:03,299
[Miles] And that's when I realized the co-founder wasn't coming back.

2
00:00:03,599 --> 00:00:04,649
[Miles] That's Jon Yoo,

3
00:00:04,799 --> 00:00:06,500
[Miles] YC Winter 2023,

4
00:00:06,700 --> 00:00:08,750
[Miles] and we're dropping you right into the moment.

5
00:00:09,050 --> 00:00:11,500
[Grant] Welcome to Year One. I'm Miles and that's Grant.

6
00:00:11,800 --> 00:00:12,250
[Miles] Hey,

7
00:00:12,300 --> 00:00:16,250
[Miles] so today's episode is a specific kind of survival story.

8
00:00:16,350 --> 00:00:16,800
[Grant] Right.

9
00:00:16,949 --> 00:00:21,000
[Grant] Jon pivoted mid-batch, spent five weeks with zero customers,

10
00:00:21,100 --> 00:00:22,350
[Grant] closed the seed round,

11
00:00:22,450 --> 00:00:23,800
[Grant] then his co-founder walked.

12
00:00:23,950 --> 00:00:25,750
[Miles] Most startups die right.

13
00:00:25,908 --> 00:00:26,358
[Miles] Right there.

14
00:00:26,408 --> 00:00:27,208
[Grant] Most do,

15
00:00:27,307 --> 00:00:33,158
[Grant] but Jon grew Suger from 500K to 2M ARR in six months with five people.

16
00:00:33,357 --> 00:00:35,057
[Grant] That's the story we're getting into.

17
00:00:35,307 --> 00:00:41,408
[Miles] Here's the thing, though. It gets more complicated because according to the Product Market Fit Show podcast on this,

18
00:00:41,408 --> 00:00:41,658
[Grant] Yeah.

19
00:00:41,658 --> 00:00:45,258
[Miles] the co-founder picture at Series A is murkier than the headline.

20
00:00:45,457 --> 00:00:47,457
[Grant] Right. And that's what we want to pull apart.

21
00:00:47,658 --> 00:00:49,908
[Grant] Three things we're really focused on today.

22
00:00:50,008 --> 00:00:53,758
[Grant] The moment Jon knew the split was coming and why nobody said it.

23
00:00:53,555 --> 00:00:54,655
[Grant] Said it out loud sooner.

24
00:00:55,105 --> 00:00:55,455
[Miles] (Two)

25
00:00:55,756 --> 00:01:02,055
[Miles] How he used early logos like Fivetran to climb up towards Snowflake. That customer sequencing is not obvious.

26
00:01:02,655 --> 00:01:03,105
[Grant] And three,

27
00:01:03,305 --> 00:01:06,555
[Grant] what a wily partner makes of cofounder splits at this stage,

28
00:01:06,855 --> 00:01:10,656
[Grant] because wily's own data on equity and breakup risk is pretty striking.

29
00:01:11,156 --> 00:01:12,605
[Miles] Plus the Series A update:

30
00:01:12,956 --> 00:01:19,006
[Miles] Suger raised fifteen million; ARR more than quadrupled in twenty twenty four; roughly two hundred customers.

31
00:01:19,284 --> 00:01:22,884
[Grant] And yet the solo founder scaling question stays wide open.

32
00:01:23,234 --> 00:01:23,634
[Miles] Yeah,

33
00:01:23,734 --> 00:01:23,984
[Miles] yeah,

34
00:01:24,034 --> 00:01:24,984
[Miles] that's what makes it interesting.

35
00:01:25,434 --> 00:01:25,734
[Grant] Okay,

36
00:01:25,984 --> 00:01:27,334
[Grant] Jon's voice is up first.

37
00:01:27,734 --> 00:01:28,434
[Grant] Let's get into it.

38
00:01:29,384 --> 00:01:32,084
[Miles] I remember the exact day.

39
00:01:32,734 --> 00:01:33,834
[Miles] It wasn't a big blow up,

40
00:01:34,084 --> 00:01:39,784
[Miles] it was just he told me he was out and I had ink drying on the seed round docs.

41
00:01:42,834 --> 00:01:44,034
[Grant] When did you know it was coming?

42
00:01:47,251 --> 00:01:47,801
[Miles] I mean,

43
00:01:47,851 --> 00:01:49,451
[Miles] I think I knew during YC,

44
00:01:49,551 --> 00:01:52,701
[Miles] five weeks without a single customer,

45
00:01:53,251 --> 00:01:53,652
[Miles] zero.

46
00:01:53,902 --> 00:01:57,201
[Miles] And that kind of silence, it doesn't just test the product.

47
00:01:57,402 --> 00:01:59,902
[Miles] It tests the person sitting across from you.

48
00:02:00,301 --> 00:02:04,951
[Miles] I've watched enough decisions fall apart in quiet moments to know when something's breaking.

49
00:02:05,551 --> 00:02:07,801
[Grant] So the cracks showed up during those five weeks.

50
00:02:11,187 --> 00:02:11,687
[Miles] Yeah,

51
00:02:11,737 --> 00:02:13,687
[Miles] but I was in denial,

52
00:02:13,737 --> 00:02:14,337
[Miles] you know?

53
00:02:14,787 --> 00:02:16,087
[Miles] You're in the middle of it.

54
00:02:16,437 --> 00:02:18,287
[Miles] Everyone around you is moving fast.

55
00:02:18,537 --> 00:02:21,487
[Miles] You convince yourself the tension is just pressure,

56
00:02:21,587 --> 00:02:22,637
[Miles] just the moment,

57
00:02:22,737 --> 00:02:23,837
[Miles] that it'll pass.

58
00:02:24,287 --> 00:02:27,737
[Miles] I've watched collectors do the same thing with failing investments,

59
00:02:28,037 --> 00:02:30,937
[Miles] tell themselves the next bid will change everything.

60
00:02:33,937 --> 00:02:34,787
[Miles] But it didn't.

61
00:02:38,237 --> 00:02:38,487
[Miles] No.

62
00:02:39,187 --> 00:02:39,887
[Miles] It didn't.

63
00:02:40,087 --> 00:02:40,587
[Speaker 3] Okay,

64
00:02:40,637 --> 00:02:41,787
[Speaker 3] so that's Jon Yoo,

65
00:02:41,987 --> 00:02:42,887
[Speaker 3] founder of Suger,

66
00:02:43,187 --> 00:02:44,937
[Speaker 3] YC Winter 2023.

67
00:02:45,587 --> 00:02:47,887
[Speaker 3] According to the Product Market Fit Show,

68
00:02:48,337 --> 00:02:50,087
[Speaker 3] he pivoted mid-YC,

69
00:02:50,537 --> 00:02:54,487
[Speaker 3] spent a brutal five weeks without signing a single customer,

70
00:02:55,087 --> 00:02:56,187
[Speaker 3] raised a seed round,

71
00:02:56,687 --> 00:02:59,137
[Speaker 3] and then his co-founder walked out the door.

72
00:03:02,337 --> 00:03:05,237
[Miles] And most startups die right there.

73
00:03:07,060 --> 00:03:08,560
[Speaker 3] Right. But here's the thing.

74
00:03:08,810 --> 00:03:17,210
[Speaker 3] He didn't. He went on to land customers like Fivetran and Snowflake and grew from $500K to $2 million ARR in six months.

75
00:03:17,460 --> 00:03:18,460
[Miles] That's wild,

76
00:03:18,509 --> 00:03:18,759
[Miles] right?

77
00:03:18,860 --> 00:03:19,860
[Miles] Because that moment,

78
00:03:20,110 --> 00:03:21,509
[Miles] seed round just closed,

79
00:03:21,659 --> 00:03:22,460
[Miles] co-founder gone.

80
00:03:22,659 --> 00:03:23,210
[Miles] That should

81
00:03:23,210 --> 00:03:23,259
[Speaker 3] Yeah.

82
00:03:23,259 --> 00:03:24,960
[Miles] be a kill shot, you know what I mean?

83
00:03:25,009 --> 00:03:26,810
[Miles] The math doesn't work on paper.

84
00:03:27,110 --> 00:03:27,659
[Speaker 3] Totally.

85
00:03:27,810 --> 00:03:29,810
[Speaker 3] And what gets me is the timing.

86
00:03:30,009 --> 00:03:32,110
[Speaker 3] June 2023, per the interview,

87
00:03:32,210 --> 00:03:33,360
[Speaker 3] the round closes.

88
00:03:33,395 --> 00:03:36,545
[Speaker 3] and within the same breath the founding team fractures.

89
00:03:36,745 --> 00:03:41,395
[Miles] I mean, investors just wired money based on a team and now that team is different.

90
00:03:41,945 --> 00:03:44,346
[Speaker 3] So the question I keep coming back to,

91
00:03:44,495 --> 00:03:53,295
[Speaker 3] was the co-founder issue actually about the five dead weeks or was YC just a stress test that revealed something that was already broken?

92
00:03:53,545 --> 00:03:54,045
[Miles] Yeah,

93
00:03:54,096 --> 00:03:54,545
[Miles] and look,

94
00:03:54,596 --> 00:03:55,695
[Miles] YC specifically,

95
00:03:55,895 --> 00:03:57,945
[Miles] the Lightcone folks have talked about this.

96
00:03:58,096 --> 00:04:00,395
[Miles] Co-founder conflict is one of the most common.

97
00:04:00,147 --> 00:04:02,048
[Miles] Most common ways early startups die.

98
00:04:02,198 --> 00:04:03,747
[Miles] And here's the part that gets me.

99
00:04:03,897 --> 00:04:05,948
[Miles] It surfaces not when things are bad,

100
00:04:05,997 --> 00:04:10,397
[Miles] but when things are about to get good, when there's real pressure and real money on the table.

101
00:04:10,597 --> 00:04:12,097
[Miles] I've seen this pattern before.

102
00:04:12,448 --> 00:04:14,698
[Miles] Crisis reveals what was already cracked.

103
00:04:15,048 --> 00:04:16,548
[Speaker 3] That's the brutal irony.

104
00:04:16,798 --> 00:04:18,598
[Speaker 3] You survive the nothing phase,

105
00:04:18,697 --> 00:04:19,398
[Speaker 3] no customers,

106
00:04:19,598 --> 00:04:20,148
[Speaker 3] no revenue,

107
00:04:20,247 --> 00:04:22,697
[Speaker 3] and then the moment there's something to lose,

108
00:04:22,848 --> 00:04:24,197
[Speaker 3] that's when it falls apart.

109
00:04:24,348 --> 00:04:24,848
[Miles] Right.

110
00:04:24,947 --> 00:04:27,747
[Miles] So Jon gets through the hardest part of YC.

111
00:04:28,115 --> 00:04:29,265
[Miles] raises the round,

112
00:04:29,466 --> 00:04:30,716
[Miles] and instead of celebrating,

113
00:04:30,966 --> 00:04:33,365
[Miles] he's figuring out how to run a company alone.

114
00:04:33,615 --> 00:04:37,865
[Speaker 3] Which raises the question Grant and I are going to push on hard when we talk to him,

115
00:04:38,216 --> 00:04:42,015
[Speaker 3] because there's a version of this story where the split was inevitable from day one,

116
00:04:42,265 --> 00:04:46,565
[Speaker 3] and there's a version where a different conversation at the right moment changes everything.

117
00:04:46,865 --> 00:04:51,466
[Miles] So which version is it, and when did Jon actually know the answer to that?

118
00:04:52,084 --> 00:04:55,184
[Miles] So there's the emotional reality we just heard.

119
00:04:55,483 --> 00:04:57,983
[Miles] Now I want to get into the actual mechanics.

120
00:04:58,483 --> 00:05:02,033
[Miles] Jon, when did you first notice something was wrong between you two?

121
00:05:02,483 --> 00:05:04,033
[Miles] Not when it became a conversation.

122
00:05:04,334 --> 00:05:05,384
[Miles] The first signal.

123
00:05:05,684 --> 00:05:06,884
[Speaker 3] Take your time with that one.

124
00:05:07,184 --> 00:05:07,684
[Miles] Yeah,

125
00:05:08,184 --> 00:05:10,584
[Miles] that hesitation right there tells me something.

126
00:05:11,033 --> 00:05:17,084
[Speaker 3] It's a hard question because the honest answer and the narrative-friendly answer are almost never the same thing.

127
00:05:17,620 --> 00:05:18,120
[Miles] Right.

128
00:05:18,220 --> 00:05:18,970
[Miles] And look,

129
00:05:19,120 --> 00:05:22,819
[Miles] the Product Market Fit Show covered Jon's story back in March 2025.

130
00:05:23,420 --> 00:05:27,519
[Miles] What comes through is that there were two separate timelines running at once.

131
00:05:27,670 --> 00:05:29,470
[Miles] The pivot happened mid-YC,

132
00:05:29,569 --> 00:05:30,470
[Miles] that's one thing.

133
00:05:30,670 --> 00:05:33,319
[Miles] But the co-founder tension from what Jon describes,

134
00:05:33,569 --> 00:05:36,519
[Miles] that was already there before the pivot forced it into the open.

135
00:05:36,819 --> 00:05:39,319
[Speaker 3] So the pivot didn't cause the split,

136
00:05:39,470 --> 00:05:40,620
[Speaker 3] it revealed it.

137
00:05:40,947 --> 00:05:43,247
[Miles] Exactly; and that gap,

138
00:05:43,298 --> 00:05:45,447
[Miles] the time between noticing and naming it,

139
00:05:45,597 --> 00:05:48,397
[Miles] that's where most founders lose weeks they can't get back.

140
00:05:48,897 --> 00:05:49,247
[Speaker 3] Jon,

141
00:05:49,347 --> 00:05:53,298
[Speaker 3] let me push on this a little, because the way you describe the split earlier,

142
00:05:53,597 --> 00:05:56,347
[Speaker 3] it sounds very resolved.

143
00:05:56,798 --> 00:05:57,548
[Speaker 3] Clean, almost.

144
00:05:57,947 --> 00:06:01,947
[Speaker 3] But a co-founder exit post seed means equity walked out with them.

145
00:06:02,048 --> 00:06:03,397
[Speaker 3] There's a vesting schedule,

146
00:06:03,747 --> 00:06:05,147
[Speaker 3] there's a buyback conversation,

147
00:06:05,447 --> 00:06:06,298
[Speaker 3] maybe there's a cliff.

148
00:06:06,708 --> 00:06:08,358
[Grant] What did that actually look like?

149
00:06:08,708 --> 00:06:09,308
[Speaker 3] Hmm.

150
00:06:09,808 --> 00:06:12,758
[Grant] Because that's the part founders almost always soften,

151
00:06:13,008 --> 00:06:13,858
[Grant] not the feelings,

152
00:06:14,208 --> 00:06:14,758
[Grant] the terms.

153
00:06:15,208 --> 00:06:15,758
[Miles] Yeah,

154
00:06:15,858 --> 00:06:19,008
[Miles] and the YC Lightcone partners have talked about this directly.

155
00:06:19,608 --> 00:06:24,958
[Miles] Garry Tan and the team published guidance on co-founder disputes specifically because it comes up so often.

156
00:06:25,208 --> 00:06:26,958
[Miles] The thing they keep coming back to,

157
00:06:27,058 --> 00:06:29,158
[Miles] the conversation where it becomes real,

158
00:06:29,408 --> 00:06:32,258
[Miles] someone has to say the thing out loud first.

159
00:06:32,458 --> 00:06:33,608
[Miles] Who said it?

160
00:06:33,808 --> 00:06:34,708
[Grant] Who initiated?

161
00:06:35,315 --> 00:06:38,015
[Miles] That question matters more than people realize,

162
00:06:38,415 --> 00:06:42,215
[Miles] because whoever says it first is also the one who has to own the decision,

163
00:06:42,465 --> 00:06:42,865
[Miles] publicly,

164
00:06:43,165 --> 00:06:45,215
[Miles] to investors who've just wired you money.

165
00:06:45,815 --> 00:06:47,015
[Speaker 3] It's brutal timing.

166
00:06:47,615 --> 00:06:55,065
[Speaker 3] Jon mentioned the co-founder had been there from the start; they'd worked together at a prior company-that's how the team formed-so this wasn't a stranger,

167
00:06:55,415 --> 00:06:57,365
[Speaker 3] this was someone he'd chosen twice.

168
00:06:57,665 --> 00:06:59,965
[Miles] Which makes the equity conversation even

169
00:06:59,965 --> 00:07:01,015
[Speaker 4] harder.

170
00:07:00,101 --> 00:07:02,101
[Miles] even harder because it's not just business.

171
00:07:02,351 --> 00:07:04,101
[Miles] There's history sitting in the room.

172
00:07:04,251 --> 00:07:04,851
[Grant] Right.

173
00:07:04,901 --> 00:07:09,151
[Grant] And that history is exactly what makes founders negotiate badly in those moments.

174
00:07:09,301 --> 00:07:16,951
[Grant] You're trying to be fair to the friendship and fair to the cap table at the same time. And those two things are almost never the same number.

175
00:07:17,051 --> 00:07:19,901
[Miles] And whatever walked out the door in that negotiation,

176
00:07:20,151 --> 00:07:23,851
[Miles] Jon had to build the next chapter of Suger around what was left,

177
00:07:23,901 --> 00:07:24,451
[Miles] solo.

178
00:07:24,701 --> 00:07:26,101
[Grant] Which is where it gets interesting,

179
00:07:26,151 --> 00:07:27,951
[Grant] because what he did the morning after that.

180
00:07:27,897 --> 00:07:28,347
[Grant] That split?

181
00:07:28,747 --> 00:07:30,797
[Grant] That's a different kind of story entirely.

182
00:07:31,247 --> 00:07:33,797
[Miles] Yeah; day one as a solo founder,

183
00:07:34,147 --> 00:07:35,047
[Miles] no co-founder,

184
00:07:35,447 --> 00:07:36,597
[Miles] fresh seed capital,

185
00:07:37,047 --> 00:07:37,947
[Miles] zero customers.

186
00:07:38,447 --> 00:07:40,297
[Miles] What do you actually do first?

187
00:07:40,597 --> 00:07:41,247
[Miles] That's next.

188
00:07:42,233 --> 00:07:43,733
[Miles] So Jon's alone now,

189
00:07:43,783 --> 00:07:44,883
[Miles] fresh seed money,

190
00:07:45,183 --> 00:07:46,133
[Miles] zero customers,

191
00:07:46,333 --> 00:07:47,383
[Miles] five people max.

192
00:07:47,583 --> 00:07:49,433
[Miles] What did he actually do on day one?

193
00:07:49,633 --> 00:07:51,983
[Grant] Yeah, and that's where it gets interesting.

194
00:07:52,283 --> 00:07:54,583
[Grant] According to the Product Market Fit Show interview,

195
00:07:54,733 --> 00:07:58,683
[Grant] his first move was to go extremely narrow on customer profile.

196
00:07:58,933 --> 00:08:00,633
[Grant] Series A and B startups,

197
00:08:00,833 --> 00:08:04,633
[Grant] specifically ones already selling through cloud marketplaces,

198
00:08:04,933 --> 00:08:06,433
[Grant] not trying to be everything to everyone.

199
00:08:06,969 --> 00:08:07,669
[Miles] Smart,

200
00:08:07,769 --> 00:08:09,719
[Miles] you pick a lane you can actually win in.

201
00:08:09,919 --> 00:08:10,569
[Grant] Right:

202
00:08:10,669 --> 00:08:13,319
[Grant] and the ladder climbing piece is what I keep coming back to.

203
00:08:13,719 --> 00:08:14,969
[Grant] He'd close a Series A,

204
00:08:15,369 --> 00:08:17,869
[Grant] use that as a story to get a Series B in the door,

205
00:08:18,269 --> 00:08:20,369
[Grant] then use that to land something bigger:

206
00:08:20,719 --> 00:08:22,469
[Grant] each logo unlocks the next.

207
00:08:23,069 --> 00:08:23,319
[Miles] Wait,

208
00:08:23,519 --> 00:08:25,169
[Miles] so the big Fivetran win,

209
00:08:25,369 --> 00:08:27,419
[Miles] that happened at the end of twenty twenty three,

210
00:08:27,819 --> 00:08:30,319
[Miles] he's barely a few months post split when that closes.

211
00:08:30,969 --> 00:08:31,519
[Grant] Yeah,

212
00:08:31,619 --> 00:08:33,469
[Grant] and think about what that logo does.

213
00:08:33,919 --> 00:08:38,719
[Grant] Fivetran was reporting around $300 million in ARR at the time, publicly.

214
00:08:39,019 --> 00:08:43,269
[Grant] So Jon walks into the next conversation and he's not pitching features anymore,

215
00:08:43,419 --> 00:08:44,819
[Grant] he's pointing at that name.

216
00:08:45,305 --> 00:08:46,505
[Miles] That's wild, right?

217
00:08:46,605 --> 00:08:48,005
[Miles] The credibility flywheel.

218
00:08:48,155 --> 00:08:51,255
[Miles] One marquee customer changes the whole sales motion.

219
00:08:51,455 --> 00:08:53,855
[Grant] And here's the part I keep asking myself.

220
00:08:54,055 --> 00:08:56,555
[Grant] Could that have happened with the co-founder still there?

221
00:08:56,855 --> 00:08:57,405
[Miles] Hmm,

222
00:08:57,505 --> 00:08:59,155
[Miles] that's the uncomfortable question.

223
00:08:59,405 --> 00:09:01,805
[Grant] Because the decision-making in that stretch,

224
00:09:01,905 --> 00:09:02,805
[Grant] who to chase,

225
00:09:02,905 --> 00:09:03,655
[Grant] who to skip,

226
00:09:03,855 --> 00:09:04,755
[Grant] how fast to move,

227
00:09:04,905 --> 00:09:06,105
[Grant] that's all Jon alone.

228
00:09:06,305 --> 00:09:07,605
[Grant] No consensus required.

229
00:09:07,955 --> 00:09:11,855
[Miles] Which is either terrifying or liberating, depending on the day, I guess.

230
00:09:11,769 --> 00:09:15,919
[Grant] Yes, probably both at the same time, but the numbers say something.

231
00:09:16,169 --> 00:09:25,419
[Grant] The Product Market Fit Show piece reports he went from $500K to $2 million in ARR in six months with five people profitably.

232
00:09:25,945 --> 00:09:30,645
[Miles] Five people, two million dollars ARR. I mean, come on, not ratios absurd.

233
00:09:31,445 --> 00:09:37,995
[Grant] absurd in the best way and he kept burn low on purpose raised the capital barely spent it yeah

234
00:09:37,995 --> 00:09:40,595
[Miles] Which tells you the growth wasn't headcount driven.

235
00:09:40,745 --> 00:09:42,245
[Miles] It was customer selection.

236
00:09:42,645 --> 00:09:43,845
[Miles] Pick Crossbeam early,

237
00:09:44,145 --> 00:09:44,895
[Miles] pick Fivetran,

238
00:09:44,945 --> 00:09:45,895
[Miles] build the story,

239
00:09:46,195 --> 00:09:47,095
[Miles] take it to Snowflake.

240
00:09:47,245 --> 00:09:52,795
[Grant] the sales motion clarified when it was just him whether that's correlation or causation

241
00:09:52,921 --> 00:09:56,221
[Grant] Jon seems to think the reorganization forced a clarity.

242
00:09:56,471 --> 00:09:59,621
[Miles] And that's exactly what I want to bring to the YC partner,

243
00:09:59,771 --> 00:10:01,971
[Miles] because the pattern matching question is,

244
00:10:02,021 --> 00:10:07,321
[Miles] does what Jon thinks saved him actually line up with what they've seen across hundreds of breakups?

245
00:10:08,021 --> 00:10:12,371
[Grant] Right. Does solo founder post-seed actually have a structural edge sometimes,

246
00:10:12,471 --> 00:10:15,671
[Grant] or did Jon just execute well enough to make it look like one?

247
00:10:16,057 --> 00:10:19,657
[Miles] The YC Partners have seen this fork dozens of times.

248
00:10:20,157 --> 00:10:22,507
[Miles] What separates the rebuild from the slow collapse,

249
00:10:22,707 --> 00:10:23,257
[Miles] that's next.

250
00:10:23,865 --> 00:10:27,115
[Miles] So that's the founder's view from inside the fire.

251
00:10:27,615 --> 00:10:31,265
[Miles] Now let's hear from someone who's watched this play out 200 times.

252
00:10:31,515 --> 00:10:34,515
[Grant] And I think what changes at this level is the framing.

253
00:10:34,965 --> 00:10:38,015
[Grant] A YC partner isn't processing Jon's story emotionally.

254
00:10:38,415 --> 00:10:39,465
[Grant] They're pattern matching.

255
00:10:39,915 --> 00:10:42,265
[Miles] Exactly. And the Lightcone podcast,

256
00:10:42,665 --> 00:10:43,965
[Miles] YC's own partners,

257
00:10:44,265 --> 00:10:44,465
[Miles] Garry,

258
00:10:44,665 --> 00:10:45,265
[Miles] Harj,

259
00:10:45,315 --> 00:10:45,715
[Miles] Jared,

260
00:10:45,965 --> 00:10:46,265
[Miles] Diana,

261
00:10:46,465 --> 00:10:50,215
[Miles] they've said publicly that co-founder breakups are the single most...

262
00:10:50,041 --> 00:10:54,291
[Miles] most common unforced error they see kill otherwise fundable startups.

263
00:10:54,641 --> 00:10:55,841
[Grant] Not market timing,

264
00:10:56,141 --> 00:10:57,091
[Grant] not bad product,

265
00:10:57,491 --> 00:10:58,441
[Grant] co-founder conflict.

266
00:10:58,741 --> 00:10:59,241
[Miles] Right,

267
00:10:59,341 --> 00:11:02,541
[Miles] and according to YC's own published commentary on Quora,

268
00:11:02,741 --> 00:11:07,091
[Miles] uneven equity splits correlate directly with higher breakup risk.

269
00:11:07,291 --> 00:11:11,841
[Miles] The logic's pretty brutal. If one person feels like they drew the short straw going in,

270
00:11:12,191 --> 00:11:13,291
[Miles] eventually they leave.

271
00:11:13,541 --> 00:11:16,591
[Grant] So the split itself is almost like a leading indicator.

272
00:11:16,985 --> 00:11:20,535
[Miles] A lagging indicator of conversations that never happened,

273
00:11:20,785 --> 00:11:22,435
[Miles] the equity number just makes it visible.

274
00:11:22,635 --> 00:11:23,185
[Grant] Okay,

275
00:11:23,235 --> 00:11:27,235
[Grant] so what does a YC partner actually see at the timing of Jon's split,

276
00:11:27,685 --> 00:11:29,135
[Grant] post-seed, post-demo day?

277
00:11:29,435 --> 00:11:31,085
[Miles] That's where it gets interesting,

278
00:11:31,435 --> 00:11:37,135
[Miles] because a split right after the seed round is the worst possible timing legally and psychologically.

279
00:11:37,535 --> 00:11:38,885
[Miles] The cap table's fresh,

280
00:11:39,135 --> 00:11:41,185
[Miles] investor's just committed based on a team,

281
00:11:41,485 --> 00:11:42,885
[Miles] and now one person's gone.

282
00:11:43,225 --> 00:11:45,575
[Grant] The investors didn't sign up for a solo founder,

283
00:11:45,675 --> 00:11:45,725
[Grant] which

284
00:11:45,725 --> 00:11:48,675
[Miles] No, and some would have passed if that's what the deck said.

285
00:11:48,775 --> 00:11:51,625
[Miles] So you've got this moment where Jon's managing the company,

286
00:11:51,775 --> 00:11:59,325
[Miles] managing investor relationships, and managing whatever the exit terms look like for someone who just left with unvested equity on the table.

287
00:12:00,025 --> 00:12:00,975
[Grant] is a lot of plates.

288
00:12:01,225 --> 00:12:04,475
[Miles] A lot of plates. And from the YC partner perspective,

289
00:12:04,925 --> 00:12:06,425
[Miles] that's where most companies fold.

290
00:12:06,525 --> 00:12:08,425
[Miles] Not because the business is broken,

291
00:12:08,575 --> 00:12:09,825
[Miles] because the founder stops.

292
00:12:09,689 --> 00:12:10,489
[Miles] Stops executing.

293
00:12:10,789 --> 00:12:13,239
[Grant] So what separates the ones who rebuild?

294
00:12:13,789 --> 00:12:15,939
[Miles] Directly, speed and clarity.

295
00:12:16,289 --> 00:12:18,439
[Miles] The founders who make it through a split fast,

296
00:12:18,589 --> 00:12:20,089
[Miles] they cut the ambiguity quickly,

297
00:12:20,339 --> 00:12:25,239
[Miles] stop relitigating the relationship internally and get back in front of customers within weeks,

298
00:12:25,289 --> 00:12:25,939
[Miles] not months.

299
00:12:26,389 --> 00:12:29,189
[Grant] Jon was closing Fivetran while all of this was happening.

300
00:12:29,689 --> 00:12:29,989
[Miles] Yeah,

301
00:12:30,089 --> 00:12:32,039
[Miles] which is I mean, that's the answer right there.

302
00:12:32,489 --> 00:12:32,839
[Grant] Okay,

303
00:12:33,239 --> 00:12:36,989
[Grant] but here's what a YC partner would flag as a longer structural problem.

304
00:12:36,729 --> 00:12:37,379
[Grant] True problem:

305
00:12:37,829 --> 00:12:41,929
[Grant] Fund raising as a solo founder post demo day is genuinely harder.

306
00:12:42,529 --> 00:12:46,329
[Grant] Investors who are used to seeing two names on a deck notice when there's one.

307
00:12:46,579 --> 00:12:49,879
[Miles] And there's no one to cover for you during the raise; you're out of the office,

308
00:12:50,029 --> 00:12:50,679
[Miles] taking meetings,

309
00:12:50,829 --> 00:12:52,629
[Miles] and the company is basically running on momentum.

310
00:12:53,329 --> 00:12:57,879
[Grant] YC's own data suggests solo founders face higher scrutiny at every stage.

311
00:12:58,279 --> 00:12:58,879
[Grant] Not impossible,

312
00:12:59,129 --> 00:13:03,429
[Grant] but you need the numbers to speak so loudly that the team composition question becomes secondary.

313
00:13:03,897 --> 00:13:14,197
[Miles] Which for Jon they did; but the question a wise YC partner would leave open is what happens at Series A and beyond when the company's complexity starts to outrun a single decision maker?

314
00:13:14,847 --> 00:13:17,497
[Grant] And that's exactly the question Suger had to answer next.

315
00:13:18,329 --> 00:13:21,229
[Miles] So here's what actually happened after all of it.

316
00:13:21,529 --> 00:13:22,879
[Miles] According to Intel Capital,

317
00:13:23,229 --> 00:13:27,329
[Miles] Suger closed a $15 million Series A in February 2025,

318
00:13:27,979 --> 00:13:33,029
[Miles] led by Threshold Ventures, with Kraft Ventures and Intel Capital coming in alongside.

319
00:13:33,379 --> 00:13:35,529
[Grant] And the ARR number is wild.

320
00:13:35,629 --> 00:13:36,479
[Grant] In 2024,

321
00:13:36,779 --> 00:13:38,329
[Grant] they more than quadrupled it,

322
00:13:38,429 --> 00:13:41,329
[Grant] roughly 200 customers by the time their round closed.

323
00:13:41,379 --> 00:13:43,529
[Miles] That's the answer to the earlier question,

324
00:13:43,679 --> 00:13:43,929
[Miles] right?

325
00:13:43,979 --> 00:13:47,079
[Miles] Like, does a solo founder slow down after the co-founder leaves?

326
00:13:47,033 --> 00:13:48,583
[Miles] We've?--the data says no!

327
00:13:49,083 --> 00:13:49,433
[Grant] I mean,

328
00:13:50,033 --> 00:13:50,883
[Grant] sort of.

329
00:13:51,233 --> 00:13:52,133
[Grant] The seed phase,

330
00:13:52,283 --> 00:13:52,483
[Grant] yeah,

331
00:13:52,683 --> 00:13:53,983
[Grant] he clearly held it together,

332
00:13:54,383 --> 00:13:56,483
[Grant] but I keep coming back to what happens now.

333
00:13:56,883 --> 00:13:57,483
[Miles] Which is?

334
00:13:57,983 --> 00:13:58,633
[Grant] Which is,

335
00:13:59,233 --> 00:14:00,033
[Grant] series A money

336
00:14:00,202 --> 00:14:01,202
[Miles] means you're hiring,

337
00:14:01,502 --> 00:14:02,452
[Miles] you're building departments,

338
00:14:02,952 --> 00:14:06,802
[Miles] you're not the only decision maker by necessity anymore even if you want to be.

339
00:14:07,052 --> 00:14:09,952
[Grant] And that's a different problem than the one he solved.

340
00:14:10,402 --> 00:14:11,402
[Miles] Completely different.

341
00:14:11,402 --> 00:14:11,702
[Speaker 3] Yeah.

342
00:14:11,702 --> 00:14:16,102
[Miles] Surviving a co-founder split at Seed is a people problem with one solution.

343
00:14:16,552 --> 00:14:17,352
[Miles] Just keep going.

344
00:14:17,952 --> 00:14:23,802
[Miles] Scaling past Series A as a solo founder is an organizational problem and those don't resolve themselves.

345
00:14:24,352 --> 00:14:27,202
[Grant] One thing I noticed in the Intel Capital press release

346
00:14:27,166 --> 00:14:27,466
[Grant] Lise,

347
00:14:27,516 --> 00:14:33,566
[Grant] they reference Jon-Anne Chengjun as co-founders, so technically there is still a co-founding team on paper.

348
00:14:33,916 --> 00:14:34,466
[Miles] Wait,

349
00:14:34,516 --> 00:14:34,816
[Miles] really?

350
00:14:35,266 --> 00:14:35,766
[Grant] Yeah,

351
00:14:36,216 --> 00:14:41,116
[Grant] Chengjun Yuan is listed as co-founder, so the question of who left and under what terms,

352
00:14:41,266 --> 00:14:42,616
[Grant] that's still not fully public.

353
00:14:43,066 --> 00:14:46,116
[Miles] Which is exactly the thing we were pushing on earlier.

354
00:14:46,416 --> 00:14:48,466
[Miles] Founders smooth the edges on this stuff.

355
00:14:48,990 --> 00:14:51,490
[Grant] Always. And it doesn't mean the story's wrong,

356
00:14:51,640 --> 00:14:54,340
[Grant] it just means there's probably a version of it we haven't heard.

357
00:14:54,740 --> 00:14:57,390
[Miles] So the cliffhanger isn't really resolved,

358
00:14:57,490 --> 00:14:57,740
[Miles] is it?

359
00:14:58,046 --> 00:14:58,946
[Grant] No.

360
00:14:59,246 --> 00:15:00,596
[Grant] The round is closed,

361
00:15:00,796 --> 00:15:02,996
[Grant] the ARR is up, the customers are real,

362
00:15:03,046 --> 00:15:07,046
[Grant] but who's actually sitting at the table when the hard calls get made at scale?

363
00:15:07,196 --> 00:15:08,296
[Grant] That part's still open.

364
00:15:08,596 --> 00:15:12,646
[Miles] And that's the question every solo founder eventually runs into.

365
00:15:13,096 --> 00:15:14,246
[Miles] Not whether they can build.

366
00:15:14,296 --> 00:15:15,446
[Miles] They clearly can.

367
00:15:15,846 --> 00:15:19,846
[Grant] It's whether the machine they built can outlast the one person holding it together.

368
00:15:20,246 --> 00:15:20,846
[Miles] Yeah,

369
00:15:20,946 --> 00:15:21,846
[Miles] that's the one.

370
00:15:22,686 --> 00:15:24,986
[Grant] Okay, so Jon Yoo,

371
00:15:25,386 --> 00:15:26,286
[Grant] seed round closes,

372
00:15:26,636 --> 00:15:27,686
[Grant] ink barely dry,

373
00:15:27,886 --> 00:15:29,736
[Grant] and his co-founder tells him he's out.

374
00:15:30,086 --> 00:15:31,386
[Miles] The worst possible

375
00:15:31,386 --> 00:15:31,536
[Grant] Yeah.

376
00:15:31,536 --> 00:15:34,086
[Miles] moment, and Jon just kept going.

377
00:15:34,336 --> 00:15:34,836
[Grant] Right,

378
00:15:34,936 --> 00:15:36,936
[Grant] and I think the line that stuck with me was,

379
00:15:37,136 --> 00:15:38,836
[Grant] the pivot didn't cause the split,

380
00:15:38,986 --> 00:15:39,786
[Grant] it revealed it.

381
00:15:39,886 --> 00:15:41,386
[Grant] That's the whole episode, honestly.

382
00:15:42,086 --> 00:15:42,586
[Miles] Totally.

383
00:15:42,786 --> 00:15:44,736
[Miles] When there's finally something to lose,

384
00:15:44,786 --> 00:15:46,186
[Miles] you find out who's really in.

385
00:15:46,486 --> 00:15:47,086
[Grant] Exactly,

386
00:15:47,436 --> 00:15:50,886
[Grant] and Suger went on to close a $15 million Series A.

387
00:15:50,846 --> 00:15:51,046
[Grant] Eh,

388
00:15:51,246 --> 00:15:53,996
[Grant] so the solo bet paid off-at least so far.

389
00:15:54,396 --> 00:15:57,496
[Miles] At least so far." The scaling question is still open,

390
00:15:57,646 --> 00:15:59,996
[Miles] which-that's kind of the point of this show.

391
00:16:00,596 --> 00:16:06,446
[Grant] Know a YC founder in year one who'd tell their story honestly; send them to year one at HeyMatto dot com.

392
00:16:06,896 --> 00:16:08,246
[Miles] And if this episode hit home,

393
00:16:08,346 --> 00:16:11,146
[Miles] drop us a review-genuinely helps more than you think.

394
00:16:11,496 --> 00:16:12,146
[Grant] Thanks for listening,

395
00:16:12,246 --> 00:16:12,396
[Grant] Grant.

396
00:16:12,746 --> 00:16:13,496
[Miles] See you next week,

397
00:16:13,596 --> 00:16:13,746
[Miles] Miles.