Chamath Palihapitiya

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Palihapitiya in 2016
Birthname Chamath Palihapitiya
Date of Birth September 3, 1976
Birth Place Sri Lanka
Nationality American, Canadian
Occupation Venture capitalist, Engineer
Biography Best known for founding Social Capital, being an early senior executive at Facebook, and his audacious personality.

Chamath Palihapitiya is a venture capitalist, engineer, and the founder and CEO of Social Capital [1]. Palihapitiya is best known for his SPAC sponsorships and being an early senior executive at Facebook. Prior to leaving Facebook in 2011, Chamath became a minority stakeholder and board member of the Golden State Warriors. Other notable achievements include owning 5% of the entire bitcoin monetary base in 2013 and finishing 101st out of 6,865 entries for the World Series of Poker in 2011[2]. Palihapitiya's net worth is said to be upwards of $1.2 billion.

Early Life

Palihapitiya was born in Sri Lanka on September 3, 1976. His father, Gamage Palihapitiya, came from an intellectual background, did not grow up financially stable, and worked as a health ministry civil servant until Chamath was six years old[3]. His mother, whose name is not mentioned online, came from a commercially successful background growing up and became a nurse later in life. They were married in their thirties and relocated to Ontario, Canada in 1982 after Gamage earned a high commission teaching job.[4] Chamath also has two sisters. At the time, Sri Lanka was experiencing violence due to ethnic conflicts which eventually turned into “one of the longest running civil wars in Asia”, so his family acquired refugee status in Canada and later became citizens. [5] Although he grew up on welfare, he attended one of the best public schools in the region, Lisgar Collegiate. [6] After graduating highschool he joined a program called Jobs Ontario Youth where he was able to earn his first decent paying job at a telecommunications company called New bridge Networks. [7] Here he was exposed to the tech industry and the wealth and success that came from it. He graduated from University of Waterloo in 1999 with a degree and first class honors in electrical engineering. [8] Two years later his career started and his success began.


Career

Early Career

In 2001, Palihapitiya joined an online media company called AOL as a software engineer. By 2004, he became the company’s youngest vice president at 26 years old. Heading AOL’s AIM division, he helped develop and execute AOL’s instant messaging(IM) technology which expanded the company’s user base and allowed AIM to retain its “top spot in the consumer IM market” against companies like Microsoft and Yahoo. [9] In 2005, Chamath Palihapitiya left AOL and joined the Mayfield Fund-- a US-based venture capital firm specializing in early-stage to growth-stage investments for enterprise and consumer technology companies. [10]. Then, a few months later, Palihapitiya left Mayfield for Facebook.

Palihapitiya at the NYSE, 2019

Facebook

Chamath Palihapitiya was initially hired by Facebook to increase its user base. The company had just celebrated its first birthday and asked Palihapitiya to manage its product marketing and operations division. By the end of Chamath’s first year, Facebook’s growth had slowed considerably. In a last ditch effort to save his job, Palihapitiya proposed the concept of monitoring monthly active users (MAU) through advanced metrics[11]. The goal was to learn how Facebook could improve MAUs, fix practices that prevented MAU growth, and to build new tools to boost MAU long term.

Shortly thereafter, Chamath built a smaller team called the “Growth Circle”, which developed features such as “People you may know” (PYMK) to increase the value of Facebook to new users[11]. Although he successfully improved Facebook’s MAUs and accelerated user growth through PYMK, Palihapitiya grew overwhelmed and left the company in 2011. According to Wired, his farewell memo warned Facebook employees “to be on alert to spot ‘the company you don’t know’ whose big ideas might displace you”.

Social Capital

Pivoting away from the social media juggernaut he helped create, Palihapitiya started his own fund called The Social+Capital Partnership with his now ex-wife Brigette Lau (the fund was renamed Social Capital in 2015)[12]. Social Capital is a technology holding company that backs breakthrough companies in areas including healthcare, artificial intelligence, climate change and space. The fund’s mission is to advance humanity by solving the world’s toughest problems. By March 2013, the fund had raised more than $275 million in its second round of fundraising. By 2015, the fund reported more than $1.1 billion in total assets. Some of Palihapitiya’s early investments include Glooko, Yammer, SecondMarket, Slack, Box, and Premise[13].

By 2020, Chamath Palihapitiya had become one of the most prominent venture capitalists in the special purpose acquisition company (SPAC) space. SPACs are shell companies created by investors with the sole purpose of raising capital to eventually acquire another company. While most companies IPO through hedge funds on Wall Street, SPACs are unorthodox in that they raise capital through more public avenues. Palihapitiya’s Social Capital has launched six SPACs thus far. His most notable SPACs to date include SoFi, Virgin Galactic, and Open Door. In a 2016 Wall Street Journal interview, Palihapitiya claimed Social Capital to be “the for-profit Justice League! We’re on the right side of good. We do the hard things.”[14]

Political Involvement

Political Views

Palihapitiya has publicly voiced support for progressive-leaning policies such as affordable housing, federally subsidized healthcare, and canceling student debt[15]. During the Bloomberg Next Big Thing Conference, he proposed the idea to create an Equality Fund, which would impose a 1% equity tax on startups in San Francisco and reallocate the funds to special economic zones in the city [16]. He described that the money should explicitly go towards solving issues of affordable housing, education funding, and community-sponsored health solutions in the city.

Political Ambivalence

Although it may seem like Palihapitiya supports many democratic endeavors, he has stated his political independence and lack of party affiliation. He believes that currently there is a disintegration of both the Democratic and Republican parties. Since there is such heavy division in the United States, he believes that there is a great opportunity for somebody in the middle to unify the country.

The State of California

Palihapitiya has supported the recall efforts against California Governor Gavin Newsom and has donated $100,000 to the cause. He announced in a tweet that he would run against him for governor if he was recalled[17]. Palihapitiya’s platform included eliminating California’s state income tax and guaranteeing a minimum annual salary of $70,000 for all teachers[18]. He later retracted his intention to run in a statement on his podcast ‘All In,’ citing that he is “not ready to do any of that.”[19]

Political Donations

Palihapitiya is a donor to the Democratic party and its politicians. Some political figures that have received financial contributions from him include Senators Elizabeth Warren and Cory Booker, along with Vice President Kamala Harris, 2016 presidential candidate Hillary Clinton, and President Joe Biden[20].

FWD.us

Palihapitiya is listed as one of the founders of political advocacy group FWD.us (pronounced “Forward U.S.”) formed by prominent leaders in the tech industry. Other notable contributors include Mark Zuckerberg (Facebook), Elon Musk (Tesla/SpaceX), Eric Schmidt (Google), and Kevin Systrom (Instagram)[21]. The group has a bipartisan agenda and was designed to lobby for policies to keep the American workforce competitive. The initial focus of the group was immigration reform as well as education reform and scientific research[22]. FWD.us has supported the Gang of Eight legislation which details guest worker programs, a pathway to citizenship, and stricter border control. Additionally, FWD.us has aimed to push for policy that increases the number of STEM graduates and more broadly secures high quality education for all students[22]. It also planned to advocate for more scientific research leading to technological breakthroughs and fostering innovation[22].

Ethics in Technology

The Social Dilemma

While speaking at a Stanford Graduate School of Business seminar in 2017, Palihapitiya admitted to feeling “tremendous guilt” about his role in developing Facebook. According to The Verge, Palihapitiya’s criticisms were not only aimed at Facebook, but the wider online ecosystem. “The short-term, dopamine-driven feedback loops we’ve created are destroying how society works,” he said, referring to online interactions driven by “hearts, likes, thumbs-up.” “No civil discourse, no cooperation; misinformation, mistruth. And it’s not an American problem — this is not about Russians ads. This is a global problem.”[23] When concluding the seminar, Palihapitiya recommended that students take a “hard break” from social media.

The Journal

In October 2015, Palihapitiya and Social Capital partnered with a technology publication The Information to publish a report on diversity in venture capital. The study found that 92% of senior investment teams at top-tier venture firms are male and 78% are white[14]. Based on the report, Palihapitiya wrote an op-ed calling for a “wake-up call” among venture capital firms that would “recapture our potential and open doors” in order to “surround ourselves with a more diverse set of experiences and prioritize a diverse set of things”. In a 2016 Wall Street Journal article, Palihapitiya stated that he doesn't "understand why less than 8% of all investors [at venture-capital firms] are women,” he says. “Men make completely different investment decisions than women do.”[14]

Twitter Presence

Palihapitiya tweet, 2020

Palihapitiya's Twitter presence has grown during the COVID-19 pandemic. With 1.4 million followers, Chamath is known for his populist financial approach towards small-scale retail investors. On January 26, 2021, he voiced his support for r/WallStreetBets and the GameStop craze by tweeting that he "bought Feb $115 calls on $GME this morning”[24]. He followed up the tweet with the phrase “ride or die.” Ultimately, he closed the position and donated all of the profits plus his original position to Dave Portnoy's Barstool Fund-- an estimated $500,000[25]. Palihapitiya's support for bitcoin has also been displayed on his Twitter account. On December 30th, 2020, he tweeted “When $BTC gets to $150k, I will buy The Hamptons and convert it to sleepaway camps for kids, working farms and low-cost housing."[24] The tweet was a jab directed at the exclusive seaside community that is home to some of the wealthiest Americans. Additionally, Chamath Palihapitiya is known for his infamous "one-pagers" that detail recent Social Capital investments and SPAC opportunities.

References

  1. ↑ [1] Retrieved 12 March 2021.
  2. ↑ Torpey, Kyle [2] Retrieved 12 March 2021.
  3. ↑ Invest in Yourself. (2020). Chamath Palihapitiya: Refugee from Sri-Lanka becomes self-made Canadian Billionaire. YouTube. https://www.youtube.com/watch?v=PDmLTCo-oN4.
  4. ↑ Invest in Yourself. (2020). Chamath Palihapitiya: Refugee from Sri-Lanka becomes self-made Canadian Billionaire. YouTube. https://www.youtube.com/watch?v=PDmLTCo-oN4.
  5. ↑ Bajoria, J. (2009, May 18). The Sri Lankan Conflict. Council on Foreign Relations. https://www.cfr.org/backgrounder/sri-lankan-conflict.
  6. ↑ Invest in Yourself. (2020). Chamath Palihapitiya: Refugee from Sri-Lanka becomes self-made Canadian Billionaire. YouTube. https://www.youtube.com/watch?v=PDmLTCo-oN4.
  7. ↑ Invest in Yourself. (2020). Chamath Palihapitiya: Refugee from Sri-Lanka becomes self-made Canadian Billionaire. YouTube. https://www.youtube.com/watch?v=PDmLTCo-oN4.
  8. ↑ Afahey. (2017, July 10). Chamath Palihapitiya Biography. Golden State Warriors. https://www.nba.com/warriors/bio/palihapitiya.
  9. ↑ Perez, J. C. (2005, December 2). AOL loses chief instant messaging executive. InfoWorld. https://www.infoworld.com/article/2672765/aol-loses-chief-instant-messaging-executive.html.
  10. ↑ McCullough, Brian [3] Retrieved 12 March 2021.
  11. ↑ 11.0 11.1 Levy, Steven [4] Retrieved 12 March 2021.
  12. ↑ Huddleston Jr., Tom [5] Retrieved 12 March 2021.
  13. ↑ Katje, Chris [6] Retrieved 12 March 2021.
  14. ↑ 14.0 14.1 14.2 Passariello, Christina [7] Retrieved 12 March 2021.
  15. ↑ Palihapitiya, Chamath [8] Retrieved 1 April 2021.
  16. ↑ Buhr, Sarah [9] Retrieved 1 April 2021.
  17. ↑ Kay, Grace [10] Retrieved 1 April 2021.
  18. ↑ Celarier, Michelle [11] Retrieved 1 April 2021.
  19. ↑ Ting, Eric [12] Retrieved 1 April 2021.
  20. ↑ OpenSecrets.org [13] Retrieved 1 April 2021.
  21. ↑ Constine, Josh [14] Retrieved 1 April 2021.
  22. ↑ 22.0 22.1 22.2 Constine, Josh [15] Retrieved 1 April 2021.
  23. ↑ Vincent, James [16] Retrieved 12 March 2021.
  24. ↑ 24.0 24.1 Schaffer, Melanie [17] Retrieved 22 March 2021.
  25. ↑ Belvedere, Matthew J.[18] Retrieved 22 March 2021.
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