There is sometimes a temptation to think of Silicon Valley almost as an abstraction. The graph reveals a core network within the PayPal Mafia consisting of Sacks, Levchin, Rabois, Thiel, and Banister. In the network graph below, the thickness of the line between two Mafia members represents the number of companies in which both members have made investments. We found that, of the 646 companies in the dataset, 103 (16 percent) received investments from multiple Mafia members. That figure is 47 percent for Rabois, 16 percent for Hoffman, 41 percent for Levchin, 46 percent for Sacks, and 18 percent for Banister. We found that 31 percent of the companies Thiel invests in also receive at least one investment from another member of the Mafia. ![]() We were also interested in examining the strength of the ties between Mafia members, and in particular whether a company receiving an investment from one Mafia member meant the company would get an investment from a different Mafia member. (In 2017, McClure resigned from 500 Startups after being accused of sexual harassment and admitting to “inappropriate” advances). Another half dozen Mafia members have invested in several dozen companies each.įor two of the Mafia members, Dave McClure and Reid Hoffman, more than 20 percent of the companies invested in had at least one female founder. Peter Thiel and Scott Banister, the most prolific investors, are each responsible for investments in over 100 companies. In the next figure we show the number of companies each individual Mafia member has invested in (so if a Mafia member invests in the same company multiple times, that only shows up as one observation). Since 2010, it has collectively made about 70-130 investments per year. ![]() The group significantly increased investment activity in the mid-2000s, when it collectively made 10-40 investments per year, and then again in 2010, when it collectively made about 100 investments. In the figure below, we show the number of investments the Mafia made over time. During the 2009-2014 period, 13 percent of startups the Mafia invested in had one such founder. To compare these numbers to the industry as a whole, a study using Crunchbase data found that, from 2009 to 2014, 15.5 percent of startups had at least one female founder. We were able to identify founders for 642 of these 646 companies, finding 89 (14 percent) with at least one female founder one startup had a founder who identifies as gender nonbinary. Overall, we found 1,005 investments by Mafia members and affiliated VC firms into 646 companies over the period from 1995 to June 2018. A more detailed explanation of our methodology can be found here. For example, Reid Hoffman was probably responsible for more investments at Greylock Partners than just the ones in which he is named as a partner on Crunchbase. We believe this methodology is conservative, and that several Mafia members are probably responsible for more investments than we’ve captured here. Additionally, we count investments if they are made by Mafia-affiliated VC firms into companies founded by Mafia members. We include personal investments made by 20 Mafia members* as well as investments made by Mafia-affiliated venture capital firms** if they are listed as “partner investments” with a Mafia member in Crunchbase. The Mafia is all-male and has been accused of contributing to the lack of women in the technology industry, so we hand-coded a variable for whether a company had at least one female founder to gauge the percentage of investments Mafia members made in such companies. Our dataset includes the investor, the company being invested in, and the date of investment we’ve added indicator variables to show if a company receives investments from multiple Mafia members and show the investors in common. Using data available from Crunchbase, Dow, and media reports of investments, we have compiled what we believe to be a quite comprehensive database of Mafia investment activity. The Mafia has inspired substantial media coverage over the years, but there has not been a thorough catalog of its investments.
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