In the early 2000s, a group of ambitious young technologists came together to build a company that would transform money forever. At the vanguard of that effort was a soft-spoken financial whiz named Ken Howery. As the first CFO of PayPal, Howery played an instrumental role in the payment platform‘s meteoric rise, IPO, and $1.5B acquisition by eBay. His impact, however, extends far beyond mere dollars and cents.
Over the past two decades, Howery has emerged as one of the most prolific venture capitalists and influential figures in Silicon Valley. As the co-founder of Founders Fund, he‘s backed industry-shaking startups like Facebook, SpaceX, Spotify, and Airbnb. His keen eye for talent and penchant for prescient bets have earned him a spot on the Midas List and an estimated net worth north of $1.5 billion.
Yet despite his staggering success, Howery has largely eschewed the limelight. He‘s the rare billionaire who‘s chosen to serve his country, spending two years as U.S. Ambassador to Sweden. Now back in the private sector, he continues to steer the course of tech‘s future away from the headlines. Here‘s a closer look at the man behind some of the most transformative companies and trends of our time.
Forging the PayPal Mafia
Howery‘s journey to the heights of Silicon Valley began at Stanford University, where he majored in economics and served as managing editor of The Stanford Review. It was there that he first crossed paths with a precocious undergrad named Peter Thiel, forging a friendship that would alter the trajectory of his career.
After graduation, Howery joined Thiel, Elon Musk, Max Levchin, and Luke Nosek to found Confinity, a startup aimed at disrupting payments through Palm Pilot-based cryptography. That early idea morphed into an online payment system that enabled secure transactions via email. In 2000, Confinity merged with Musk‘s X.com and adopted the PayPal name. Howery came aboard as the company‘s inaugural CFO.
The ensuing ‘PayPal Mafia‘ lore is now the stuff of Silicon Valley legend – a dream team of entrepreneurial talent that would go on to create Tesla, LinkedIn, YouTube, Yelp, and more. But at the time, their revolution-in-the-making was a much scrappier affair. "Like many other great companies, PayPal‘s business model went through lots of iterations before we figured it out," Howery recalled.
Under Howery‘s financial stewardship, the company navigated the dot-com crash and post-9/11 uncertainty to become a fintech phenom. PayPal‘s user base exploded from 1 million to 20 million in the span of a year, driven by its popularity among eBay sellers. Howery managed the company‘s blockbuster 2002 IPO and acquisition by eBay just months later for $1.5 billion. At the time of the sale, PayPal was processing over $10 billion in annualized payment volume for 20 million users across 38 countries.
PayPal‘s growth during Howery‘s tenure as CFO was staggering:
- User base exploded from 1 million to 20 million in 1 year
- $10B+ in annualized payment volume at acquisition
- 38 country footprint at acquisition
- IPO and $1.5B sale to eBay within months
After the acquisition, Howery spent a year as eBay‘s Director of Corporate Development before leaving to launch his next act. But the bonds formed in those early PayPal days would endure, as the ‘mafia‘ collaborated and supported each other‘s new ventures for years to come. The experience also crystalized one of Howery‘s core leadership philosophies: "The absolute most important thing is the people you work with—way more so than the business idea you‘re working on."
Betting Big with Founders Fund
In 2005, Howery teamed up again with Thiel to start Founders Fund, a venture firm that would channel their PayPal winnings into the next wave of disruptive technologies. With a contrarian philosophy of "founder primacy", the duo set out to back outlier entrepreneurs pursuing wildly ambitious ideas.
Howery was instrumental in growing Founders Fund from a small $50 million fund to a powerhouse with over $3 billion under management by the time he moved on in 2019. The firm made prescient early investments in transformative companies like Facebook, SpaceX, Palantir, Airbnb, Stripe, and Spotify, minting billions in returns for their limited partners.
At the core of this success was a unique approach to venture capital that Howery helped shape. In contrast to the herd mentality of many VCs, Founders Fund constructed a concentrated portfolio and was willing to hold positions for 10+ years to reap outsized rewards. They sought out brilliant founders pursuing world-changing ideas, even if – and often because – they didn‘t fit the typical Silicon Valley pattern-matching.
"The most important companies tend to look nothing like the companies that have existed before them, which is why all of our team members are generalists," Howery explained. His team intentionally hired from eclectic backgrounds to bring fresh perspectives on emerging trends and outlier talent. "Intelligence is important, but by far the most important thing is to find teams that can think very independently."
This maverick mindset was perhaps best embodied by the firm‘s $20 million bet on SpaceX in 2008. At a time when private space companies were far from fashionable, Howery and Thiel went all-in on Elon Musk‘s quixotic quest to colonize Mars. A decade later, that stake was worth over $1 billion after SpaceX‘s valuation soared 50-fold.
Howery‘s unconventional bets at Founders Fund paid off big:
- $20M into SpaceX in 2008 returned $1B+ by 2018
- $500K into Facebook returned $3B+
- Stake in Airbnb surpassed 50x return with IPO in 2020
Beyond the big wins, Howery developed a reputation as a VC who truly supported founders for the long haul. He forged tight relationships with portfolio company leaders like Spotify‘s Daniel Ek, even taking board seats to provide hands-on guidance. Whereas many investors optimize for quick flips, Howery stayed the course through the ups and downs of building something meaningful.
From Sand Hill Road to Foggy Bottom
After 25 years in Silicon Valley‘s inner circle, Howery surprised many in 2019 by accepting President Trump‘s nomination to serve as U.S. Ambassador to Sweden. The transition from VC to diplomat may have seemed curious, but Howery viewed it as a natural extension of his business ethos.
"Being a venture capitalist and being a diplomat have a lot in common. It‘s all about fostering relationships, building alliances, and finding common ground in pursuit of big goals," Howery told TechCrunch. "Sweden is one of the most innovative countries in the world, and I‘m excited to strengthen the ties between our startup ecosystems."
During his two-year stint in Stockholm, Howery applied his tech acumen to advance transatlantic collaboration around 5G, AI, quantum computing and cybersecurity. He helped broker deals for Swedish telecom giant Ericsson to build 5G equipment in the U.S., paving a middle path between American and Chinese providers. And when the pandemic struck, he worked to untangle critical medical supply chains between the countries.
While Howery kept a low profile during his ambassadorship, Swedish media praised him as an engaged and intellectually curious diplomat who elevated the relationship. His tenure also underscored the growing prominence of the Valley‘s power players in shaping foreign affairs. As the nexus of technological innovation and geopolitical competition intensifies, more tech executives may be called upon to don diplomatic hats.
Howery‘s Path to Billionaire Status
Thanks to his early involvement in PayPal and subsequent smash hits at Founders Fund, Howery has amassed an estimated net worth of $1.5 billion. While he doesn‘t often flaunt it, he ranks among the wealthiest members of the PayPal Mafia, having multiplied his nest egg many times over since the company‘s sale.
Howery‘s 3% stake in PayPal at the time of acquisition was reportedly worth around $45 million. He quickly parlayed those proceeds into a series of savvy venture investments, including turning a $500K Founders Fund stake in Facebook into a $3 billion position by the time of its IPO. His fund‘s ownership in SpaceX has likely minted Howery hundreds of millions more on paper as the company‘s valuation has marched toward $100 billion.
Howery‘s net worth over time:
- ~$45M from PayPal sale in 2002
- Broke $1B by 2012 based on Facebook and other Founders Fund stakes
- Estimated $1.5B as of 2021 (per Forbes)
Vs fellow PayPal Mafia billionaires:
- Elon Musk: $250B+
- Peter Thiel: $7B+
- Max Levchin: $1.5B+
- Reid Hoffman: $2B+
Despite his 10-figure bank statement, Howery maintains a relatively low-key lifestyle. He owns homes in Austin and San Francisco, but doesn‘t have the sprawling real estate portfolio of some peers. He‘s never married and has no children. And while he‘s been a committed supporter of causes like micro-lending platform Kiva, most of his philanthropy happens away from the spotlight.
As Howery enters his late 40s, there‘s ample speculation about what mountains he may seek to summit next. With his track record and connections, any startup would welcome him as an investor. Given his policy interests and recent diplomatic foray, a jump into politics isn‘t out of the question. Or perhaps he‘ll channel his capital toward cracking some of the existential threats facing humanity, as he wrote in the Founders Fund manifesto.
Whatever the next chapter holds, it‘s safe to assume Howery will stay true to the qualities that have defined his quiet ascent: Deep intellectual curiosity, strong convictions, and an obsession with finding and empowering brilliant people to solve hard problems. As a master of the art of the long game, he‘ll continue to shape the future while letting others grab the headlines. And in doing so, he‘ll leave an indelible mark on the technology industry – and perhaps the world itself.
What lessons can aspiring entrepreneurs and investors draw from Ken Howery‘s illustrious and unconventional career? Share your thoughts in the comments!