👋 Hi, I’m Andre and welcome to my newsletter Data-Driven VC which is all about becoming a better investor with Data & AI. Join 27,310 thought leaders from VCs like a16z, Accel, Index, Sequoia, and more to understand how startup investing becomes more data-driven, why it matters, and what it means for you.
Brought to you by VESTBERRY - Portfolio Intelligence Platform for data-driven VCs
It's your chance to explore the intriguing and constantly evolving world of VC technology! The first 10 VCs to subscribe to our newsletter, "The Venture Compass," get a free ticket to the event.
Join us for the Venture Intelligence Day conference, packed with networking, discussion, and workshops with experts and thought leaders on data-driven and industry-shaping topics.
Good Relationships Only Harm Those That Don’t Have Them
Creating alpha in finance is all about proprietary access and superior interpretation of data. From venture capital investors who hear about and access this new hot deal before anyone else to hedge fund managers trading on insider knowledge. The spectrum is broad yet all asset classes have in common that professionals rely heavily on their networks.
I wrote about the basics of knowledge graphs and what social network analysis of founders and VC tells us in 2022, and had many of you share innovative applications based on Twitter and LinkedIn data with me since.
Recently, Johan Torsell (one of the Master students I supervised at Earlybird in the past) launched his project Venture Maffia and I thought it would be valuable for our community to learn more about it.
Thank you Johan for sharing the backstory and what successful alumni networks have in common in the guest post below!
Power of Alumni Networks
The PayPal Mafia is famous for starting and investing early in successful startups like Tesla, Uber, and Airbnb. This group has demonstrated the power of alumni networks through contributing to 575 startups, collectively raising more than $200 billion. Many other successful startups have, like PayPal, become critical founder factories shaping the startup ecosystem.
To explore these networks, I analysed data from over 1,000 startups and developed Venture Mafia. This web app shows the most influential alumni networks and the startups they have supported as investors, executives, advisors, and board members.
Case Study: The PayPal Mafia
The PayPal Mafia of 28 former PayPal founders and executives has been involved in 575 companies as investors, executives, advisors, or board members. Combined, these companies raised over $200 billion, leading to 188 acquisitions and 44 IPOs, with exits totalling more than $430 billion. Some of the most notable companies they have supported include Uber, Tesla, Airbnb, OpenAI, and Meta.
Among these alumni, Peter Thiel (Co-founder & CEO) has been the most active investor, with 91 investments in companies like Stripe and Block.one. Max Levchin (Co-founder & CTO) follows with 77 investments, and Reid Hoffman (Executive VP) with 66.
Thiel has also founded 9 companies after PayPal, including Founders Fund and Palantir Technologies. Roelof Botha (CFO) holds the most board positions with 23, largely due to his role at Sequoia.
After eBay acquired PayPal, 6 PayPal Mafia members joined eBay as executives. Many others have continued to work together across various companies, such as Yelp and Clarium Capital, highlighting the connection strength within the founding team.
Subscribe to DDVC to read the rest.
Join the Data Driven VC community to get access to this post and other subscriber-only content.
Join the Community