Andrew McCormack has worn many hats over his impressive career – PayPal executive during the company‘s early days, hedge fund operator, restauranteur, principal investor, and now co-founding partner of Valar Ventures, an NYC-based VC firm. His journey has been greatly impacted by his membership in the elite "PayPal Mafia" as well as his long-time business relationship with PayPal co-founder Peter Thiel.
Privileged Beginnings
McCormack‘s early life followed an almost stereotypical path for a future business leader. He attended the prestigious Loomis Chaffee School in Connecticut, where he was on the varsity water polo team. He then graduated from the University of Pennsylvania in 1998 with a Bachelor‘s in Political Science.
His educational background in politics would prove surprisingly relevant in the coming years as he navigated complicated corporate transactions and high-profile business relationships.
The PayPal Years
McCormack‘s first major professional venture started in 2001 when he joined PayPal, the payments company that would soon revolutionize online transactions. He worked closely with Peter Thiel as an assistant, putting him in the inner circle during PayPal‘s meteoric rise.
McCormack was deeply involved in PayPal‘s IPO preparation and eventual sale to eBay in 2002 for $1.5 billion. The early PayPal employees and investors would go on to be dubbed the PayPal Mafia – an elite group of tech industry power players like Elon Musk, Max Levchin, and Thiel himself.
The PayPal Mafia at party in 2007, Andrew McCormack top right. Source: History Computer
The PayPal Mafia term was first coined in 2002 by Eric Jackson, an early PayPal employee. What started as a small inside joke among former colleagues went on to have major significance as the PayPal Mafia members dominated headlines for their future business success.
After the $1.5 billion PayPal acquisition, PayPal Mafia members would go on to found or invest early in companies like Tesla, LinkedIn, YouTube, Yelp, and Facebook. By 2020, the total value of companies partially created by PayPal Mafia members was calculated to be a staggering $500 billion, with thousands more in indirect impact.
Betting on Thiel
After the eBay sale, McCormack continued to stick close to Thiel, a relationship that would define much of his future entrepreneurial activity. He briefly served as COO of Clarium Capital, Thiel‘s hedge fund, before deciding to strike out on his own in an unlikely industry.
Despite no prior restaurant experience, McCormack co-founded the Sprezzatura Restaurant Group in San Francisco. Sprezzatura focused on bringing quality Italian food with California flair to the Bay Area. Their two restaurants – Frisson and Laiola – earned strong reviews for their inventive menus and cocktails featuring fresh local ingredients.
After five years developing Sprezzatura into a modest regional success, McCormack sold his stake in the restaurant group, netting a healthy return in the process.
The lure of his past ultimately proved too strong though. In 2008, McCormack rejoined forces with Peter Thiel at Thiel Capital in a corporate development role. He spent five years there working on high-level transactions for big tech names like Yahoo! and eCount.
At Yahoo!, McCormack focused mainly on potential acquisition targets in emerging segments like mobile data and social media. Although Yahoo ultimately struggled in the late 2000s, McCormack‘s forward-looking suggestions laid the foundation for their future push into digital media beyond search and email.
Betting on the Future at Valar Ventures
In 2010, McCormack branched out again to co-found Valar Ventures, an NYC-based venture capital firm focused on investing in high-growth tech companies.
Valar specifically targets startups located outside of Silicon Valley and positions themselves as turnaround experts looking for undervalued investment opportunities. Their portfolio reflects this global ambitious approach with companies from Europe, Canada, and America.
Some of Valar‘s most notable investments include:
| Company | Location | Valuation |
|---|---|---|
| Wise | London | $5 billion |
| N26 | Berlin | $3.1 billion |
| Stash | New York | $1.4 billion |
| Qonto | Paris | $1 billion |
| Xero | New Zealand | $9 billion |
Valar‘s co-founder James Fitzgerald suggests that their advantage comes from exploring markets ignored by West Coast investors.
"We believe innovation is global. Some of the most talented founders can come from anywhere in the world now. We help them access the Silicon Valley network early before valuations hit the roof."
With McCormack at the helm scouting for promising startups, Valar has quickly established itself as a formidable player in the VC ecosystem. Their track record of picking global breakout companies early speaks to McCormack‘s innate ability to spot technology trends before they go mainstream.
Stash CEO Brandon Kreig had this to say about working with McCormack:
"Andrew draws on knowledge from across sectors to offer creative solutions. He always brings fresh ideas to the table while respecting founders‘ visions."
The Peter Thiel Bubble
While McCormack has certainly paved his own way in the investing world with Valar Ventures, much of his background and network ties back to one person – Peter Thiel.
McCormack met Thiel during his stint at PayPal and has worked with or for him at four different companies since then – Clarium Capital, Thiel Capital, and now Valar Ventures which received early funding from Thiel‘s Founders Fund.
This had led to McCormack being described as part of Thiel‘s inner "Peterverse" – an informal group of longtime friends and collaborators that mix business and pleasure. Other prominent Peterverse members include Blake Masters, Joe Lonsdale, and Keith Rabois.
There‘s no doubt that having the backing of a Silicon Valley heavyweight like Thiel has opened doors for McCormack that might have otherwise been closed. It was his PayPal Mafia status that brought him into Thiel‘s orbit early on. However, McCormack has still managed to carve out his own distinct path over the past 20 years in both predictable and unpredictable ways.
Outside of his extensive business dealings, McCormack is an avid squash player and fan of independent films. He serves on the board of Prep for Prep, a non-profit focused on leadership development for minority students in NYC.
Wealth That Spans Industries
Due to his varied business interests that span tech, restaurants, hedge funds, and venture capital, it‘s difficult to pin down McCormack‘s exact net worth. Most estimates peg it at $11 million or more.
Given Valar Ventures‘ hot streak picking startup winners though, that figure seems likely to grow substantially in the years ahead as more of their portfolio companies get acquired or go public.
For an Ivy League political science major who started out in tech as Peter Thiel‘s assistant, McCormack has shown an incredible knack for identifying value and emerging trends across multiple industries.
His journey highlights the outsized opportunities that come from having powerful friends but also the ability to know when to leave the comfort of those connections and strike out on one‘s own. McCormack remains someone to watch in New York‘s blossoming startup scene.
