Business

PayPal creator recalls early days

  • 27 August 2010
  • From the section Business

Long hours and late nights are familiar to most entrepreneurs.

PayPal co-founder Max Levchin found himself working so much, it was easier not to go home at all.

He kept a sleeping bag with him in those early days and would often bed down in the courtyard of PayPal's building - the so-called 'lucky building' at 165 University Avenue.

"We started out with people having an office each," recalls Levchin. "And then we had two people per office... And after five people per office, we really were just quite out of space."

This turbo-charged expansion was typical of the successful start-ups in Silicon Valley at the end of the 1990s.

PayPal had come to 165 University Avenue with a staff of fewer than 20. Less than a year later when it moved out to larger premises, there were 65 on the payroll.

Smart investor

The building's landlord Saeed Amidi is a smart investor and took the wise step of asking for a share in PayPal as a condition of the lease.

"Normally your landlords any place in the world except Silicon Valley will say, 'Well I need a safety deposit or I need to make sure you have a straight job,'" says Levchin.

"It's always about how credit-worthy are you and your credit is expressed in hard cash that you can bring to the table."

Not so in the case of Saeed Amidi, who seemed more interested in the company's business plan and technology. He asked questions more typical of a venture capitalist than a landlord.

"They were definitely very smart about deciding whether to let us in or not," says Levchin. "And they wanted to tie our success to their real estate fortunes by asking for a stake in the company."

In 2002, less than two years after they outgrew the offices at University Avenue, PayPal became a public company and was snapped up by internet auction giant eBay for $1.5 billion dollars.

By pegging himself to his tenant's rising fortunes, Saeed Amidi has also been able to enjoy some of his building's extraordinary luck.