Max Levchin

Cofounder of PayPal; angel investor

• Born: July 11, 1975
• Place of Birth: Kiev, Ukraine

Primary Company/Organization: PayPal

Introduction

Cofounder of PayPal. Max Levchin is a Ukrainian-born, but primarily American-raised, computer scientist who has used his technology skills and business savvy to become a successful Silicon Valley entrepreneur. As a founder and key driving force behind the online payment-processing company PayPal, in 2002 he helped lead the first successful initial public offering (IPO) of a technology company after the terrorist attacks of September 11, 2001. After selling the post-IPO PayPal to eBay later in 2002, he then founded, invested in, and became chief executive officer (CEO) of Slide, an online service designed to give people an easy way to improve their blogs and personal pages with photo slide shows, videos, and other visual content. After selling Slide to Google in 2010, Levchin founded Affirm, a lending company that helps people pay for items purchased online.

Early Life

Maximilian Rafael Levchin is one of four children of a theoretical physicist mother and a poet-playwright father, born on July 11, 1975, in Kiev, Ukraine. His family emigrated from Ukraine to Chicago, Illinois, in 1991 under political asylum for reasons having to do with religious persecution (he is Jewish). Once in Illinois, his family settled in the West Ridge neighborhood on the border of Chicago and its adjacent suburb to the north, Evanston. After graduating from Mather High School in 1993, Levchin went to the University of Illinois at Urbana-Champaign, graduating in 1997 with a bachelor's degree in computer science. While an undergraduate, he became infamous for his all-night coding sessions. That notoriety led him to meet others with similar interests in technology and coding, with whom he cofounded companies named NetMeridian Software (which developed early palm-top security applications) and SponsorNet New Media (which provided advertising services on the Internet); each ultimately failed.

Life's Work

Shortly after his graduation from the University of Illinois in 1997, Levchin relocated to Silicon Valley and cofounded a company named Fieldlink, which eventually became known as Confinity and then PayPal. Fieldlink was a payments and cryptography company limited to the Palm Pilot platform. In 2000, after having changed its name to Confinity, the company merged with a company named X.com, an Internet financial services company that focused on e-mail payments and was founded by Elon Musk. The combined entity was then renamed PayPal, and Levchin became its chief technical officer.

While Confinity was forming, merging with X.com, and ultimately becoming PayPal, the online payments space began to burgeon with competitors, including Citibank's c2it, Yahoo!'s PayDirect, and Western Union's BidPay. At the same time, eBay was becoming increasingly interested in the space, and this interest led eBay ultimately to acquire an online payments company named Billpoint. It renamed Billpoint as eBay Payments and reduced its functionality so that it worked only with eBay auctions. Despite the leverage of eBay behind it, the limited functionality of the eBay Payments product made it unpopular with consumers, and by early 2000 PayPal was being used as the payment mechanism for far more eBay auctions than not only Billpoint but also all other mechanisms combined.

In February 2002, PayPal sold an initial public offering (IPO) of just less than 10 percent of its then-outstanding stock, raising more than $70 million, with its stock price rising more than 50 percent on the first day of trading. In the process, PayPal became the first successful Internet IPO following the terrorist attacks of September 11, 2001. Levchin's 2.3 percent share of the company had a value of roughly $17 million.

In October of 2002, PayPal was acquired by eBay for $1.5 billion worth of eBay stock. Levchin was then twenty-six years old and had a net worth of roughly $34 million. He remained a PayPal executive after the eBay acquisition until December 2002. Although he left only two months after acquisition, that was longer than any other PayPal executive had remained.

After leaving PayPal, Levchin spent a year traveling, putting his newfound wealth and financial affairs in order, and contemplating returning to school to earn a doctorate. During this time, he decided that his true passion was starting and running companies, and he decided to return to entrepreneurship. He also began dabbling in angel investing, which led over time to a portfolio that includes Yelp (a local-area shopping and social networking company for which he was chairman of the board, 2004–15), IronPort (sold to Cisco), LiveOps, Mixpanel, WePay, Quid, Emerald Therapeutics, and others.

In August 2005, Levchin founded a company named Slide, with an initial funding of $78 million, $7 million of which was his. Slide was launched as a service designed to give people an easy way to improve their blogs and other personal webpages with photo slide shows, videos, and other visual content. By 2005, the Internet already had multiple popular photo-sharing sites, but Levchin envisioned a new way to share visual content with products such as the multimedia FunWall and SuperPoke, which let users virtually “hug,” “punch,” or “throw” animal images at other users.

In August 2010, Google announced that it was acquiring Slide for $182 million. That acquisition added another $34 million to Levchin's net worth and, when he agreed to work for Google after the acquisition, the title of Google vice president of engineering to his résumé. While the purchase price of $182 million was significant, it was far less than the valuation of up to $500 million that Slide had sometimes garnered during its fund-raising rounds. Neither Slide's products nor its personnel successfully integrated into Google, and only a year after the acquisition, in August 2011, Google announced both that it was shuttering the Slide service and that Levchin was leaving Google to pursue other opportunities.

In early 2012, Levchin launched HVF Labs, an incubator employing tactics similar to those that Levchin used to launch Slide and other companies in which his role was more limited (such as Yelp). He serves as its president. Also in 2012, he cofounded and chaired the health data firm Glow and the finance tech start-up Affirm, for which he remains CEO as of 2024. He founded SciFi VC, a venture capital firm, in 2017.

Affirm is a lending company that helps people pay for items they buy online. In 2021, Affirm became a publicly traded company, increasing Levchin's net worth to $1.1 billion.

Personal Life

In September 2008, Levchin wed longtime girlfriend Nellie Minkova. They settled in San Francisco with their wheaten terrier, Uma, and maintained a vegetarian lifestyle. The only reported visible extravagance of Levchin's wealth was the house in which they lived, which was listed for sale in 2019 at $7.25 million. The Levchins have a son, Benjamin, and a daughter, Emma.

In his leisure time, Levchin enjoys endurance road cycling, fermented foods, music (particularly electronic), art, general science, mathematics (particularly discrete math), literature, theology, and geometry.

Bibliography

Jackson, Eric M. The PayPal Wars: Battles with eBay, the Media, the Mafia, and the Rest of Planet Earth. Torrance: World Ahead, 2008. Print and digital.

Kasparov, Garry, Max Levchin, and Peter Thiel. The Blueprint: Reviving Innovation, Rediscovering Risk, and Rescuing the Free Market. New York: Norton, 2012. E-book.

Livingston, Jessica. Founders at Work: Stories of Startups' Early Days. Berkeley: Apress, 2008. Print.

"Max Levchin." Forbes, 6 Mar. 2024, www.forbes.com/profile/max-levchin/?sh=3cbbb85eb681. Accessed 6 Mar. 2024.