Levchin: There are...
Levchin: There are different segments to running a startup. Different people
taught me different things. A lot of the top management people at PayPal were
really good. It was very fun and meaningful to work with them and pick up their
various interests and skills.
I never really paid much attention in college in econ, and I never really took
any accounting classes. One night I came over to our CFO’s office, and I said, “I
really don’t understand a lot of the balance sheet math and all this stuff. I’m
pretty good at math, so I should be able to get it, but I just don’t understand the
language, so teach me accounting.” We had this crazy multihour session where
he was explaining accounting to me. I learned debits and credits and why certain
things are called what they are; liabilities versus assets and capital. Until
then, I had no idea. It was maybe a year into the company, and I thought,
“I really should understand this balance sheet stuff. It’s kind of an art.”
I had never really raised money before, so when Peter was raising money,
I was tagging along as much as I could, trying to pick that up.
Livingston: Did you have a good relationship with your investors?
Levchin: It’s one of these things where, if you look back now, when everyone
walked away with a ton of money, everyone loves everyone. We had this great
time, etc. It’s generally more complicated than that where, when the company
is doing well, they’re happy and they think they’re great. The company’s not
doing well; they’ve overpaid and they’ve been too nice. It’s half and half. I think
I was blissfully spared a lot of it because Peter managed the board much more
than I did.
I was on the board all through my tenure there, but a lot of the more
unpleasant conversations were handled by Peter. I got involved more as the
fraud thing grew. For a long time, it was one of these things where—I was really
much younger than now—my whole “brand” both to the investors and to our
board members was this crazy Russian boy-genius who comes out and sprinkles
magic dust on technology and things just work.
So for a long time I got away with, “Don’t ask how it works. Max will solve it.”
It worked OK until the scalability problems hit us, and then I had to be much
more vocal and explain to the board, “Here’s what’s going on. Here’s what I’m
doing about it. It will be OK. Just chill out.” Then, when the fraud thing
became my primary concern, obviously I had to get involved much more
because it had to do with things they dealt with on a daily basis: money. So I had
| ← are doing it | to prepare much → |