Keith Rabois has enjoyed wild success but also courted controversy since his early days with the famed PayPal mafia. His prescient investments and leadership roles speak to his influence, but sexual harassment allegations cut short his tenure at Square. Still flush with PayPal fortune and backing diverse startups, Rabois remains a tech leader to watch – for better or worse.
From Small Town Striver to Stanford Provocateur
Rabois grew up in central New Jersey in an upper middle class family. His mother was a teacher turned salesperson and his father a mild-mannered CPA. Though comfortable, Keith became ambitious at a young age with early interest in making money and networking beyond his hometown. He started a lawn business at 12 years old and enrolled at Stanford intent on accessing Silicon Valley.
Rabois certainly left his mark at Stanford, as part of the controversial "Free Spartacus" movement challenging campus speech codes in the early 90s. Though admirable in spirit, their provocative tactics like screaming outside a professor’s house went too far. But this presaged Rabois’ tendency to aggressively push boundaries with mixed results.
| Leadership Style | Pros | Cons |
|---|---|---|
| Tenacious | Drives progress, growth | Angers people |
| Unfiltered | Straight talk | Crosses lines |
| Forceful | Gets results | Sparks backlash |
PayPal Mafia Ties Birth a Tech Financier
After college, Rabois headed to Harvard Law then clerked for an appellate court. But his highest-upside move was joining new payments startup PayPal in 2000 alongside future billionaires Peter Thiel and Elon Musk. Though not a founder, Rabois left an imprint by managing regulatory and legal affairs pre-IPO.
PayPal’s sale making Rabois an overnight millionaire was only the beginning, as this exclusive network seeded successful startups for decades to come. Rabois tapped this pipeline early and often. Right after PayPal, Rabois helped Reid Hoffman grow LinkedIn for over 2 years. He then reunited with Max Levchin as an exec at Slide, a social gaming startup.
But as early as 2006, Rabois was secretly making angel investments that later paid off handsomely. His first investment was in Yelp, which later surged over 6X after its IPO.
| Company | Investment Year | IPO/Exit Year | Return Multiple |
|---|---|---|---|
| Yelp | 2006 | 2012 | 6X |
| Triggit | 2007 | — | 20X acquisition |
| Geni | 2007 | — | 5X acquisition |
| Practice Fusion | 2008 | — | 7X acquisition |
Swinging for the Fences as VC…and Missing at Square
After Slide sold for $182M plus earnouts, Rabois took his biggest swing yet as COO of the red-hot payments company Square in 2010. And this time, he reported directly to eccentric leader Jack Dorsey in Square’s early startup phase.
Square was seeking fast growth just as Rabois invested heavily in startups like Eventbrite, Kissmetrics, and Opendoor as a venture partner. But his brand of hard-charging leadership rubbed some subordinates the wrong way according to reports.
Then in early 2013, Rabois resigned from Square after an employee’s boyfriend threatened to sue for sexual harassment related to a prior relationship. Rabois called it extortion, but admitting the relationship with an employee reflected questionable judgement. Ironically Rabois lost his COO role at a company hoping to modernize finance, partly over an old-school scandal.
While Rabois left Square failing to evolve its culture quickly enough to match its lofty mission, he continued investing through Khosla Ventures in future giants like DoorDash, Affirm, Stripe and more. His early bets ultimately created tremendous wealth for his funds and limited partners.
Shopify, Miami Beckon as Rabois Stays Hungry
Never one to slow down or play it safe, Keith Rabois has continued taking risks likefew others in the PayPal mafia orbit. After 6 years and a string of outlier returns at Khosla Ventures, Rabois joined Founders Fund to keep investing alongside Peter Thiel.
In keeping with his knack for identifying platforms before they’re ubiquitous, Rabois recently raised $75 million to acquire small e-commerce merchants operating on Shopify. His new startup OpenStore gives him both pricing power and leverage should Shopify itself go public or get acquired.
Professionally and personally, Rabois also migrated to Miami as more financiers flock to Florida for lower taxes and costs of living. Having just turned 50 years old, he shows little sign of slowing down even as some Silicon Valley peers step back.
So while perhaps not destined to become a household name on par with Bezos or Musk, Keith Rabois continues surfing between stunning success and self-induced turmoil. His fearless investing and leadership provokes strong reactions as he chases returns for partners, if not public adoration. For a member of the ultra-elite PayPal mafia accustomed to landing on top more often than not, perhaps that’s enough.
