It Pays to Have Pals in the Valley
Since 2002, when dozens of employees left PayPal after it was bought by eBay for $1.5 billion, those workers have gone on to start or join a new generation of Internet companies and other ventures. They have remained a tight-knit group, attending each other’s parties, helping to shape each other’s business plans, backing each other’s companies and recruiting each other for new projects.
Silicon Valley was largely built by networks of people and companies whose interlocking relationships help to spawn new start-ups. But the PayPal alumni have been unusually prolific, especially given the company’s modest size compared to Internet giants like Netscape, eBay and Yahoo.
“PayPal may have the highest ratio of individuals going off to start or finance new start-ups in the Valley,” said Scott Dettmer, a founding partner of Gunderson Dettmer, who has been providing legal advice to venture capitalists, start-ups and entrepreneurs since the 1980’s.
One of the first engineers hired at PayPal, for example, was Russel Simmons, who went on to become a co-founder of Yelp. Mr. Simmons, in turn, helped convince another engineer, Yu Pan, to join PayPal. Mr. Pan went on to become one of the first people hired at YouTube. Other University of Illinois recruits included Mr. Chen and Mr. Karim, two-thirds of YouTube’s founding troika. “YouTube is like a PayPal reunion,” Max Levchin said. A YouTube spokeswoman declined to make Mr. Hurley and Mr. Chen available for this story.
“What happened at PayPal is pretty unusual in that the PayPal alumni have ended up founding some pretty impressive teams and companies,” said Ron Conway, an “angel” or early-stage investor who has backed more than 400 start-ups.
6 votes
