The Biggest Names That Emerged from the PayPal Mafia

Discover the top companies founded by the PayPal Mafia, including Tesla, YouTube, and LinkedIn, and their impact on the tech industry.
Aug. 7, 2024
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In 2002, eBay bought PayPal to the tune of $1.5 billion. In the transaction, the e-commerce player acquired a ragtag bunch of engineers, designers, and businessmen who had thrived in the chaos of an early internet start-up.

They didn’t last long in eBay’s ranks.

Frustrated by the confines of corporate structure, only 15 of PayPal’s original 50-person staff were still at eBay by 2006. However, what they had learned within PayPal would go on to reshape the tech world and the market.

They would become known as the PayPal Mafia.

The term was first coined in a 2007 Fortune cover story by Jeffrey M. O’Brien. Big names include Elon Musk, Peter Thiel, Reid Hoffman, and Max Levchin. Following the eBay acquisition, these tech pioneers branched out to create some of the most successful ventures in the industry and are often credited with re-introducing consumer-facing tech. More importantly, they supported each other through investments, collaborations, and board seats, helping their new companies thrive.

Here are some of the most notable companies that originated from the PayPal Mafia:

1. Tesla

Founded by Martin Eberhard and Marc Tarpenning, Tesla became a household name when Elon Musk, a co-founder of PayPal, joined the company in 2004. Musk's vision and leadership transformed Tesla into a leader in electric vehicles, pushing the boundaries of automotive technology and renewable energy solutions.

2. YouTube

YouTube, the world’s leading video-sharing platform, was co-founded by Steve Chen, Chad Hurley, and Jawed Karim, all of whom were early PayPal employees. Launched in 2005, YouTube revolutionized online video content, eventually being acquired by Google in 2006 for $1.65 billion in stock.

3. Facebook

In August 2004, Peter Thiel made a $500,000 angel investment in Facebook for a 10.2% stake in the company, marking the first outside investment in Facebook and valuing the company at $4.9 million. As a board member, Thiel provided critical guidance on funding rounds, helping Facebook secure its financial future before the 2008 financial crisis.

4. Yelp

Jeremy Stoppelman, a former VP of Engineering at PayPal, co-founded Yelp in 2004. Yelp has since become a go-to platform for user-generated reviews of local businesses, significantly influencing consumer decisions and local marketing.

5. SpaceX

SpaceX, founded by Elon Musk in 2002, aims to revolutionize space travel and make it more affordable. The company has achieved numerous milestones, including the first privately-funded spacecraft to reach the International Space Station and the development of reusable rockets.

6. LinkedIn

Reid Hoffman, a former PayPal COO, co-founded LinkedIn in 2002. LinkedIn has grown to become the world’s largest professional networking site, connecting millions of professionals and providing a platform for career development and business networking.

7. OpenAI

Elon Musk was one of the biggest initial investors in OpenAI, a research organization dedicated to advancing artificial intelligence in a safe and beneficial manner. Founded in 2015, OpenAI focuses on ensuring that AI technologies benefit all of humanity.

8. Palantir Technologies

Co-founded by Peter Thiel, Palantir Technologies specializes in big data analytics. Since its founding in 2003, Palantir has provided solutions for various industries, including defense, finance, and healthcare, leveraging data to solve complex problems and drive innovation.

PayPal the Foundations of Modern Tech

The PayPal Mafia's influence extends far beyond the companies they created or invested in. Their collaborative spirit, willingness to take risks, and support for each other's ventures have reshaped the tech industry, leaving a legacy that continues to inspire new generations of entrepreneurs.

Should you invest $1,000 in PayPal right now?

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