Difference between revisions of "Chamath Palihapitiya"

Revision as of 13:08, 22 March 2021

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 rebellious personality.

Chamath Palihapitiya (born September 3, 1976) is a venture capitalist, engineer, and the founder and CEO of Social Capital^[1]. A Sri-Lankan-Canadian American, 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 and moved with his family to Canada at the age of six. He attended Lisgar collegiate institute and graduated at the age of 17. Palihapitiya majored in electrical engineering at the University of Waterloo before starting his career as a derivatives trader at BMO Nesbitt Burns^[3].

Career

Early Career

In 2001, Palihapitiya joined AOL as a software engineer. By 2004, he became the company’s youngest vice president ever at 26 years old. Heading AOL’s AIM division, he helped develop AOL’s instant messaging technology. 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. After just a few months, Palihapitiya left Mayfield for Facebook^[4].

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^[5]. 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^[5]. 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

Palihapitiya at the NYSE, 2019

Seemingly frustrated with 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)^[6]. 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 hardest 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^[7].

By 2020, Chamath Palihapitiya had become one of the most prominent venture capitalists in the special purpose acquisition company (SPAC) space. SPACs are essentially 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 their ability to 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.”^[8]

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.”^[9] 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^[8]. 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, Palihapitiya stated that “I don’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.”^[8]

Twitter Presence

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”^[10]. He followed the tweet up with “ride or die.” Ultimately, he closed the position and donated all of the profits plus his original position to Dave Portnoy's BarStool Small Business Fund-- an estimated $500,000^[11]. Palihapitiya's support for bitcoin has also been displayed on his twitter. On December 30th, 2020. he tweeted that “When $BTC gets to $150k, I will buy The Hamptons and convert it to sleepaway camps for kids, working farms and low-cost housing"^[10]. The tweet was a jab directed at the exclusive seaside community 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. ↑ Pal, Raoul[3] Retrieved 12 March 2021.
4. ↑ McCullough, Brian [4] Retrieved 12 March 2021.
5. ↑ ^{5.0 5.1} Levy, Steven [5] Retrieved 12 March 2021.
6. ↑ Huddleston Jr., Tom [6] Retrieved 12 March 2021.
7. ↑ Katje, Chris [7] Retrieved 12 March 2021.
8. ↑ ^{8.0 8.1 8.2} Passariello, Christina [8] Retrieved 12 March 2021.
9. ↑ Vincent, James [9] Retrieved 12 March 2021.
10. ↑ ^{10.0 10.1} Schaffer, Melanie [10] Retrieved 22 March 2021.
11. ↑ Belvedere, Matthew J.[11] Retrieved 22 March 2021.