For all the talk of Silicon Valley’s meritocracy, who you know often matters most. Venture capital firms rarely, if ever, accept unsolicited pitches. Email addresses listed on their websites are black holes. One venture capitalist told me over a 20-year career he couldn’t think of a single investment that came unsolicited instead of through a “warm” introduction by a friend or colleague. If a founder can’t find their way to an investor, the reasoning goes, how will they land a customer or recruit the best talent?
That makes Silicon Valley’s network its most important currency. And few are as important, or influential, as the PayPal Mafia. This boys club—an all-male cohort of 20 founders and early investors in PayPal, which eventually sold to eBay for $1.5 billion in 2002—have gone on to become some of the Valley’s most prolific investors. Among them are Elon Musk, who founded Tesla and SpaceX, and Reid Hoffman, who co-founded LinkedIn. VentureBeat analyzed 1,005 investments into 646 companies by Mafia members or their venture firms from 1995 to mid-2018 (you can see the original dataset here).
To get a sense of their activity, we summarized the top investors and startup recipients below. Billionaire Peter Thiel, through personal investments as well as vehicles such as Founders Fund, tops the list. Not surprisingly, the top two recipients of PayPal Mafia deals are Affirm (financial services) and Palantir (data analytics), both backed by Thiel.
The full findings make for fascinating reading.
Top 20 companies that have received investments from PayPal mafia