YouTube was founded in February, 2005 by Chad Hurley (CEO), Steve Chen (CTO), and Jawed Karim (advisor) who were all early employees of PayPal.Prior to PayPal, Hurley studied design at Indiana University of Pennsylvania. Chen and Karim studied computer science at the University of Illinois at Urbana-Champaign.The domain name "YouTube.com" was activated on February 15, 2005,with the website launching shortly thereafter. In November, 2005, venture capital firm, Sequoia, invested $3.5 million in YouTube.Sequoia Capital partner Roelof Botha, former CFO of PayPal, joined the board of directors at YouTube. By December, YouTube had caught up with iFilm, another popular video website which had been bought by Viacom for $49 million. In April, 2006, Sequoia Capital invested a further $8 million in YouTube.[citation needed]

The site's popularity skyrocketed in December 2005 when it hosted the popular Lazy Sunday clip from a Saturday Night Live broadcast[citation needed]. In February, 2006, NBC Universal asked YouTube to remove several copyrighted NBC video clips, including Lazy Sunday and 2006 Olympics clips, from their site.However, Sky One allowed the release of the Real Life Simpsons Intro, which garnered considerable popular attention.

In March 2006, all Family Guy videos were taken down from the site after complaints by the show's owners. In April 2006, YouTube set a 10-minute limit on videos, except those uploaded through its Director Program.