Founders At Work: Uncovering The Truth Behind A Hotmail Founder’s Claims

In 2007 Jessica Livingston, a founding partner at Y Combinator, released a book called Founders at Work: Stories of Startups' Early Days in which she transcribed over thirty extensive interviews with some of Silicon Valleys most notable successes. Included in the book was an interview with Hotmail co-founder Sabeer Bhatia, who detailed the experiences he had raising money for the webmail startup and its subsequent acquisition by Microsoft for a tidy sum of $400 million. In the interview, Bhatia made some strong accusations regarding early-stage venture fund Draper Fisher Jurvetson (DFJ), stating that DFJ had actively tried to dissuade other VCs from investing in the company (so that they could be the only ones to invest in Hotmail's funding rounds). He also denied that DFJ's Tim Draper had come up with the idea of including 'viral' taglines at the end of each message inviting new users to join Hotmail, instead attributing the idea to Hotmail co-founder Jack Smith. Today Livingston has written a blog post asserting that some of the statements made by Bhatia are incorrect:

I received evidence yesterday that some of the things Sabeer Bhatia said in his interview in Founders at Work were false. The evidence indicates that (a) Tim Draper rather than Jack Smith had the idea of putting a Hotmail ad at the bottom of emails sent by the service, and (b) that DFJ didn't disparage Hotmail to other VCs interested in investing.