paypal-mafia

PayPal Mafia: The PayPal Mafia Members In A Nutshell

The PayPal Mafia describes a group of former PayPal employees and founders who have since become involved with other tech companies. While most know SpaceX founder Elon Musk’s association with PayPal, the company also has links with YouTube, LinkedIn, and Yelp, among many others. In addition to founding these generation-defining companies, the members of the PayPal Mafia are some of the richest men in Silicon Valley. 

Elon Musk

who-is-elon-musk
Elon Musk, seen as one of the most visionary tech entrepreneurs from the Silicon Valley scene, started his “career” as an entrepreneur at an early age. After selling his first startup, Zip2, in 1999, he made $22 million, which he used to found X.com, which would later become PayPal, and sell for over a billion to eBay (Musk made $180 million from the deal). He founded other companies like Tesla (he didn’t start it but became a major investor in the early years) and SpaceX. Tesla started as an electric sports car niche player, eventually turned into a mass manufacturing electric car maker.
how-does-elon-musk-make-money
Elon Musk has made most of his money by investing in ideas and companies he is passionate about. After eBay acquired PayPal for $1.5 billion in 2002, Musk used his personal wealth to fund his new ventures: Tesla and SpaceX. Most of Elon Musk’s wealth comes from Tesla, as he’s the major shareholder for the company. Making Elon Musk’s net worth well past the hundred billion-dollar mark.

Peter Thiel

Often referred to as the “Don” of the PayPal Mafia, Peter Thiel is one of the original co-founders of PayPal.

Thiel earned $55 million from his 3.7% stake in PayPal after it was sold to eBay, after which he created the hedge fund Clarium Capital and became the first outside investor in fledging Facebook.

His original $500,000 investment would now be worth approximately $9 billion, though the billionaire reduced his holdings by 81% in 2020.

Thiel is also the co-founder of Palantir Technologies, a software and data integration company with clients in the United States Government, military, intelligence, and police. 

Jawed Karim

At PayPal, Karim was responsible for implementing the company’s real-time anti-fraud system. 

Once his tenure ended, Karim founded YouTube with former PayPal colleagues Steve Chen and Chad Hurley.

Karim continued to act as an advisor while studying computer science at Stanford University.

Once YouTube was acquired by Google, Karim sold his shares which at the time were worth $64 million. 

In 2008, Karim founded Youniversity Ventures with early PayPal investors Kevin Hartz and Keith Rabols. The company helps students and graduates develop viable business ideas.

Jeremy Stoppelman

Jeremy Stoppelman had a very early role at PayPal, joining the company as an engineer while it was still known as X.com. He eventually attained the title of Vice President of Engineering.

Stoppelman was another member of the PayPal Mafia to benefit from the eBay acquisition – at least indirectly.

He founded the online review site Yelp with former colleague Russel Simmons after contracting the flu and experiencing difficulty finding a good doctor.

Reid Hoffman

Hoffman joined PayPal as its COO in 2000, handling all external communications. At the time of the eBay acquisition in 2002, he was executive vice president.

Shortly thereafter, Hoffman co-founded LinkedIn – one of the first business-oriented online social networks.

LinkedIn was then acquired by Microsoft in June 2016 for $26.2 billion, with Hoffman taking a seat on the board.

linkedin-business-model
LinkedIn is a two-sided platform running on a freemium model, where to unlock unlimited search and other features, you need to switch to a paid account. In addition, LinkedIn is the most successful B2B advertising platform. In fact, by 2022, with over 850 million members, LinkedIn generated over $6 billion in revenues through its Talent Solutions and over $5 billion through its Marketing Solutions (B2B advertising platform). Acquired by Microsoft for $27 billion in 2016, LinkedIn might now be worth anywhere between $100-150 billion. 

In more recent years, Hoffman has been involved with philanthropic projects.

He currently serves on the boards of the microlending service Kiva and the social change organization Do Something.

Hoffman is also associated with Endeavor Global, which identifies and supports entrepreneurs in emerging markets.

Reid Hoffman is the author of Blitzscaling.

what-is-blitzscaling
Blitzscaling is a business concept and a book written by Reid Hoffman (LinkedIn Co-founder) and Chris Yeh. At its core, the concept of Blitzscaling is about growing at a rate that is so much faster than your competitors, that make you feel uncomfortable. In short, Blitzscaling is prioritizing speed over efficiency in the face of uncertainty.

David O. Sacks

David Sacks joined PayPal in 1999 from the management consultancy firm McKinsey & Company.

As COO before the appointment of Hoffman, Sacks was responsible for project management, design, sales and marketing, customer service, fraud operations, and human resources functions.

During his tenure, he grew PayPal revenue to 240 million per year, introduced business accounts, and expanded the platform into multiple currencies and over 80 countries.

Sacks has arguably the most diverse resume of any PayPal Mafia member. In 2005, he produced and financed the satirical comedy Thank You for Smoking.

The following year, he founded the genealogy website Geni.com and Yammer, a social network and productivity tool for internal corporate communication.

Angel investment in technology companies is also a passion for Sacks, having been involved in the industry for two decades. Some of his investments include Airbnb, Eventbrite, Opendoor, Postmates, Scribd, Slack, and Uber.

Key takeaways:

  • The PayPal Mafia describes a group of former PayPal employees and founders who have since become involved with other tech companies. Elon Musk is perhaps the most well-known member.
  • Peter Thiel is one of the original co-founders of PayPal and is often referred to as the “Don” of the PayPal mafia. Jawed Karim, responsible for implementing PayPal’s fraud protection system, later founded YouTube with colleagues Steve Chen and Chad Hurley.
  • Former COO Reid Hoffman left PayPal after the eBay acquisition to found LinkedIn. David O. Sacks, also a former COO, has produced a movie and founded a corporate social network since his time at PayPal. Sacks is also a passionate angel investor.

Read Also: Zero to One, Blitzscaling.

Read More: How Does TD Ameritrade Make MoneyHow Does Dave Make MoneyHow Does Webull Make MoneyHow Does Betterment Make MoneyHow Does Wealthfront Make MoneyHow Does M1 Finance Make MoneyHow Does Mint Make MoneyHow Does NerdWallet Make MoneyHow Does Acorns Make MoneyHow Does SoFi Make MoneyHow Does Stash Make MoneyHow Does Robinhood Make MoneyHow Does E-Trade Make MoneyHow Does Coinbase Make MoneyHow Does Affirm Make MoneyFintech Companies And Their Business Models.

Is Elon Musk part of the PayPal Mafia?

Elon Musk is one of PayPal’s members. Indeed, Elon Musk founded X.com, which eventually would merge with Confinity to create PayPal.

Who is the richest of the PayPal Mafia?

Elon Musk is the wealthiest of PayPal’s members, with a net worth, which in 2022 ranged between $180-230 billion. Elon Musk owns Tesla, SpaceX, Twitter, The Boring Company, and Neuralink.

Why is it called PayPal Mafia?

The founding team of PayPal created many companies that defined Silicon Valley after the 2000s. Companies like Tesla, SpaceX, LinkedIn, YouTube, Palantir, and many others came from PayPal’s founding team. That is how they got the title of “PayPal Mafia.”

Why did PayPal remove Elon?

In an internal war in the year 2000, as Elon Musk flew to enjoy his honeymoon, he was ousted as the company’s CEO from the team who led the coupe (Levchin and Sachs primarily, as they wanted to bring back Peter Thiel as CEO of the company). Eventually, as Musk was on his plane back to California, he could not fight back and got ousted as CEO. Musk, with the money from PayPal, exists, as it got sold to eBay, founded SpaceX, and invested in Tesla in the very early days.

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