“My chess ability was roughly at the limit. “Taken too far, chess can become an alternate reality in which one loses sight of the real world,” he says. (He was once ranked among the top under-21 chess players in the country, but he gave up playing competitively. But finance has always been more his thing – Institutional Investor named his hedge fund, Clarium Capital, “global macro fund of the year” in 2005. from Stanford and did some time as a corporate lawyer. programs and dropped out.”īorn in Germany, Thiel has a J.D. “PayPal wanted to hire people who got into Ph.D. “The difference was that Google wanted to hire Ph.D.s,” says Roelof Botha. He’s numerate in the extreme and is an accomplished clarinetist whose athletic pursuits don’t typically take him beyond table tennis. A bilingual immigrant from Kiev, Ukraine, Levchin is the hypercompetitive son of a playwright father and a physicist mother. In other words, they were looking for people like themselves. Levchin (left) and Theil hatched the idea for PayPal over breakfast. Levchin’s original idea for PayPal was to beam money between PalmPilots, but Thiel has a way of seeing the bigger picture. They wanted competitive, well-read, multilingual individuals who, above all else, had a proficiency in math. They were looking for a specific type of candidate. “I hired friends from Stanford, and Max brought in people from the University of Illinois.” “It basically started by hiring all these people in concentric circles,” Thiel remembers. After their first breakfast, Thiel and Levchin (left with Thiel) began recruiting everyone they knew at their alma maters. But even by that standard, PayPal was a petri dish for entrepreneurs. It’s the reason people come to the area from all over the world. In some ways they’re classic characters of Silicon Valley, where success and easy access to capital breed ambition and further success. This group of serial entrepreneurs and investors represents a new generation of wealth and power. Thiel and Levchin, the don and consigliere of the mafia, figure that all told, there are dozens of enterprises worth a total of roughly $30 billion – and that value is growing rapidly, as evidenced by Thiel’s good fortune with Facebook. It’s amazing how many hot web properties can trace their ancestries to PayPal.īesides Facebook (FB) and Slide, there’s Yelp, Digg, and YouTube. And the mafiosi have been busy.ĭuring the past five years they’ve been furiously building things – investment firms, philanthropies, solar-power companies, an electric-car maker, a firm that aims to colonize Mars, and of course a slew of Internet companies. They even have a name for themselves: the PayPal mafia. Most of PayPal’s key employees left eBay, but they stayed in touch. The eBay deal, remarkable only because it happened in the bleakness of 2002, wasn’t so much an exit as an explosion. No frat boys, MBAs, or, God forbid, jocks.Īnd then things got interesting. Many of PayPal’s early hires matched a specific profile: highly intelligent workaholics who were good at math. They’d sign up more than 20 million users and burn $180 million in funding before breaking even and selling out to eBay (EBAY) for $1.5 billion. They’d bring on several hundred employees to what would become PayPal. Their brainchild would change the course of the Internet. Every garment on Levchin’s unwashed body is a freebie – University of Illinois zip jacket, mismatching shorts, bright orange T-shirt with some Hebrew lettering. The doorbell rings, and in walks a scruffy, sleepy-eyed Max Levchin, 32, who has trekked over from his new $5 million-plus home a few blocks away in Pacific Heights. “I’m Peter,” he says, extending his hand and smiling before thanking me for agreeing to such a late breakfast meeting. Wearing a powder-blue T-shirt wet with sweat, he displays the relaxed self-confidence of Michael Corleone. Just back from a morning run, Thiel emerges into the dining room of his home in the shadow of San Francisco’s Palace of Fine Arts. He drives a half-million-dollar McLaren supercar. The man has bankrolled everything from restaurants to movies and is lauded by many as some kind of free-market genius. He’s got an early $500,000 stake in Facebook that’s now worth about $1 billion on paper. He’s the founder of a new venture capital firm that’s the talk of Silicon Valley. The 40-year-old entrepreneur runs a $3 billion hedge fund. Make yourself comfortable in the dining room. A door opens, and a blond man appears in a white jacket with large buttons.
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