Tom Blomfield on YC, Fundraising and the Founder’s Job

Tom Blomfield says founders need to hold two ideas at once: an ambitious long-term vision and a concrete priority for this week. In conversation with Harry Stebbings, the Y Combinator group partner reflects on founding, investing and advising startups.

Blomfield recalls early attempts to make money, including selling his mother’s jewelry and building websites as a teenager. He agrees that entrepreneurial behavior can show up young, but warns that prescribing a single early-life pattern would miss founders who develop later.

The yes that changed his life, he says, was acceptance into Y Combinator in 2011. His team’s interview felt chaotic because the three founders contradicted each other, yet YC accepted them. Exposure to ambitious peers and experienced founders gave them role models he says they lacked in London.

His hardest rejection came while raising money for Monzo in early 2020. After 96 rejections, he says two Canadian pension funds agreed to invest alongside existing investors, but paused the deal when London entered lockdown. He recalls revenue halving in the following week and urgent uncertainty about financing.

Existing investors ultimately put in $100 million at what he remembers as roughly a $1.3 billion valuation, around a 40% down round. His account describes a difficult negotiation over risk and fairness; the numbers and sequence are his recollection.

Blomfield describes the emotional strain of pitching repeatedly while trying to remain confident. He recalls successive investor objections to Monzo, from customers switching banks to depositing salaries and generating revenue, and credits the team after his departure for subsequent growth. The customer and revenue figures he cites are company-specific claims.

After leaving Monzo, he took time to recover and began angel investing with money from selling some GoCardless shares. He says he made 76 investments in nine months, 56 in the UK, spending a pool intended for several years. He found the administrative work and solo decision-making lonely.

His largest lesson was not to overvalue an idea because he could imagine executing it himself: the founder, not the investor, must do the work. He still looks for a plausible path to a very large company in the best-case scenario, but says he cannot plan that outcome precisely.

YC offered colleagues and operational support as well as capital to invest, in exchange for moving to Silicon Valley. Blomfield rejects the claim that European founders simply work less hard; in his experience, the more striking difference is optimism and ambition, a cultural impression rather than a measured comparison.

He recalls a UK lawyer doubting that a 28-year-old without banking experience could become a regulated bank CEO. In the US, he says, people more often responded to his ambition with offers of help. He treats these experiences as examples of a broader cultural difference.

Asked about Monzo’s US expansion, Blomfield says its initial attempt had not succeeded. He estimates only a small share of company spending went there and argues that a UK product cannot simply be copied into a different market; he says a new US team will need to rethink the offering.

At YC he spent 18 months as a visiting partner, which he likens to a teaching apprenticeship. He credits colleagues with helping founders find ideas in their experience and deliver difficult feedback with warmth. His own challenge as a full partner is accepting that he advises rather than runs the company.

Stebbings asks whether founders give YC advice too much weight. Blomfield says responses vary: good founders need to think independently, and some ignore advice entirely. He argues that an investor need not find every exceptional founder personally likable, although he recognizes that this can make relationships harder.

He associates some founders’ contrarian drive with impatience toward broken systems, drawing on his own experience as an employee. This is his interpretation of founder behavior, not a claim that unpleasantness is necessary for success.

Blomfield describes YC’s selection process: partners can select applications to interview and take responsibility for companies they choose to fund. He says he typically reads several thousand applications, interviews around 100 teams and funds about 25 per batch; these figures describe his own process at the time.

In a short interview he looks for a founder who can teach him something new through deep domain knowledge and obsession. Stebbings worries a nervous candidate could need more time; Blomfield says the written application, video and background also matter, and that interview performance is only part of the decision.

One application question asks about a non-computer system the candidate has understood and used to their advantage. Blomfield says he looks for evidence of unusual initiative in any part of a person’s life, not simply conventional educational and career credentials.

YC generally requires participants to spend three to four months in San Francisco, he says. He prefers the relationships built through in-person office hours and meals, while keeping remote interviews and a remote presentation format for demo day. These are his views on the program’s balance.

Each YC group has its own partners and speakers. Blomfield describes weekly dinners, individual office hours every other week and alternating group office hours with seven to nine companies. Founders exchange practical knowledge and publicly set short-term goals, which he says creates accountability.

A common batch mistake, he says, is launching too late. His answer to concerns about imperfect first impressions is to narrow scope drastically while maintaining high quality, rather than release a broad but mediocre imitation of an incumbent product.

The founder must also hold the best-case vision alongside immediate execution. Blomfield contrasts Monzo’s ambition to serve a billion people with the actual weekly work required to make progress. A distant vision without execution is empty, while execution without ambition may produce a smaller business.

He estimates that 20–25% of batch companies pivot. His advice is to choose an idea and work on it for a meaningful period instead of repeatedly changing direction because of uncertainty about a lifetime commitment. The percentage is his rough program estimate.

Blomfield says YC encourages founders to begin fundraising roughly two weeks before demo day rather than earlier. He argues that early approaches can lead to rejection before sufficient progress or a preemptive offer without competitive alternatives; he describes this as the program’s practice at the time.

He recalls a strong team accepting an early offer because the founder was nervous about raising. He believes waiting for a competitive process could have improved the round, but that counterfactual cannot be verified.

YC’s advice varies by company, he says. He worries that giving away 25–30% at seed can overly dilute founders, but rejects the idea that YC imposes a fixed 10% rule. A founder may reasonably consider 15–20% for a particularly valuable lead investor.

Before product-market fit, Blomfield generally favors raising less: too much capital can encourage premature hiring and slow iteration. Once a company has found fit, he says, investment in growth can make sense. Stebbings agrees that oversized seed rounds can reduce urgency.

They discuss investor behavior. Blomfield says YC keeps founder reviews of investors and describes problems such as an investor agreeing to a commitment but delaying the wire until a round is full. Stebbings adds that extensive diligence by a very small check can consume disproportionate founder time.

Blomfield says YC is preparing to share data with founders on investor meetings, investment conversion and check size, after checking the records with funds. His illustrative conversion rates and check amounts are explicitly made-up examples, not published measurements.

He says investor interest is directionally predictable from a combination of founder and traction, though not perfectly. He estimates roughly 80–85% of YC companies raise their target amount, sometimes more slowly than expected; this is his approximate claim.

YC partners share carry across the partnership, he says. The organization does not rank partners by how much their companies raise, because optimizing for fundraising could encourage the wrong behavior. Blomfield is experimenting with curated founder dinners to strengthen relationships across groups.

On AI, Blomfield compares its potential to earlier internet and smartphone shifts and expects substantial effects over decades. He anticipates both improved incumbent products and entirely new consumer businesses. These are forecasts, not demonstrated outcomes.

He does not know whether foundation-model investments will be profitable. His preferred outcome for YC, startups and society is several similarly capable models competing at commodity-like prices; he acknowledges that would not necessarily benefit the investors in those model companies.

He worries about dependence on a single dominant model and expects talent and techniques to spread across competitors, while recognizing the future is uncertain. At the application layer, he argues defensibility can come from understanding industry regulation, workflows and existing software, not merely wrapping a model.

Stebbings argues incumbents may win through distribution. Blomfield responds that general-purpose software may not meet specialized professional needs and cites a YC company building patent-writing tools. His positive assessment of that portfolio company comes with YC’s investment interest.

He says larger companies are newly willing to experiment with AI, and encourages relevant B2B startups to sell to midmarket and enterprise buyers. He reports seeing some companies convert experiments into recurring contracts and reach substantial revenue within a batch; those anecdotes do not establish typical results.

Blomfield says he does not yet know whether he is a good investor and still enjoys the speed of building. He does not want to found another large company: he found leading a heavily regulated bank exhausting, although he remains proud of Monzo. His criticisms of regulators reflect his experience and opinion.

Stebbings argues exceptional company building requires imbalance. Blomfield agrees intense effort may be necessary for a short period but questions whether he could maintain it for decades. He remembers the sacrifices of Monzo’s early employees and the tension that arose as the company grew.

He says he continued to love Monzo’s product but eventually struggled with the organization’s scale and regulatory demands. He praises the leaders who succeeded him and says the company thrived after his departure, challenging his earlier fear that it depended on him.

Leaving also required rebuilding his identity. Moving to the US and joining YC as a visiting partner felt humbling: at Monzo a casual remark could mobilize a team, whereas at YC he had to learn to contribute without the same authority.

In quick fire he praises Paul Graham’s ability to energize founders by imagining the best possible outcome. He says this kind of optimism can encourage people to share their ideas, in contrast to reflexive cynicism.

For a fintech board, he would choose Ribbit’s Mickey Malka, citing the quality of their conversations. He also recounts an unpleasant experience with SoftBank’s London team and an unnamed investor who tried to change terms late in a round; these are his personal accounts, not findings about the named firm or unnamed individual.

He credits Monzo seed investor Eileen Burbidge with extraordinary practical help, including temporarily working at the company when it lost a people executive. He notes that Monzo was a large position for her, giving her a financial interest in its success.

Blomfield praises YC CEO Garry Tan for focusing on the core batch and sees complacency as the main long-term threat to the organization. As a YC partner, he has a professional and financial interest in the institution he is assessing.

He says money and external validation once drove him to build and remain at Monzo, but now matter less. He values intellectually engaging work alongside cooking, pottery, cycling, friends and time away from a full executive calendar.

He misses friends and family in London, but says introductions and his enjoyment of hosting made it easier to build friendships in the US. Looking ten years ahead, he hopes to continue work he enjoys, split time between places and possibly build a family rather than run another large company.