The history of PayPal tracks the ebb and flow of several famous Silicon Valley entrepreneurs, from Elon Musk to Peter Thiel. Musk became a major shareholder of PayPal but the company fired him as CEO in 2000. He remained a big stakes shareholder, but his firing ended Musk's efforts to turn PayPal into a supermarket of financial services, including loans and deposits as well as online payments. Other Silicon Valley leaders, including Max Levchin and Thiel, refocused PayPal on fighting fraud and handling more transactions on eBay, which bought PayPal in 2002 for $1.4 billion. Musk received payment of $100 million, which he used to start SpaceX. In 2015, eBay sold PayPal in 2015 and its saga continues.
Ukrainian native Max Levchin and two of his future PayPal colleagues met in college before moving to Palo Alto, California.
PayPal combines two online payment companies. Confinity and X.com battled for buyers and sellers on eBay before the two merged in a tense truce.
Born in Ukraine, Max Levchin immigrated to the United States in 1991 at age 16. He attended the University of Illinois at Urbana-Champaign (UIUC), home of the National Center for Supercomputing Applications. There he met Luke Nosek and Scott Banister, who both later worked with him at PayPal. They started a tech company focused on classified ads for websites. Banister and Nosek moved to California to join the emerging internet economy and Levchin later followed.
Peter Thiel abandoned pursuing a law career, traded derivatives as a Credit Suisse employee and, in 1996, started Thiel Capital, a California hedge fund. Thiel and his business partner leased a broom closet as an office in Menlo Park at 3000 Sand Hill Road, the prestige street for venture capital firms.
One of Thiel Capital’s first investments went to a digital business Luke Nosek started, and Nosek told...