Keith Rabois joins Founders Fund amid transition at the firm

Longtime investor Keith Rabois is joining Founders Fund as a general partner, the firm let us know today. He brings its total number of partners to nine.

According to Founders Fund, Rabois will invest across sectors and stages, like all members of its investment team.

The move is wholly unsurprising in ways, though the timing seems to suggest that another big fund from Founders Fund is around the corner, as the firm is also bringing aboard a new principal at the same time — Delian Asparouhov — and firms tend to bulk up as they’re meeting with investors. It’s also kind of time, as these things go. Founders Fund closed its last flagship fund with $1.3 billion in 2016.

Rabois, like the founders of Founders Fund, is a member of the so-called PayPal mafia, working as EVP of business development, public affairs and policy at the payments company between late 2000 and late 2002.

Others to launch Founders Fund include Peter Thiel, who co-founded PayPal and served as its CEO, taking it public in 2002: Luke Nosek, who co-founded PayPal and was its VP of business strategy; and Ken Howery, who co-founded PayPal and was its CFO from 1998 through 2002. The firm’s fourth co-founder, Sean Parker, left in 2014. (Parker was not part of PayPal’s earlier days, as he was busy running Napster, then a short-lived contacts management company Plaxo, at the time.)

The men met as Stanford students, working together at times at the Stanford Review, a right-wing student newspaper that was co-founded by Thiel and supported by fellow classmates Rabois, Howery and numerous others, including entrepreneur-investors David Sacks and Joe Lonsdale.

Rabois joins Founders Fund from Khosla Ventures, where he spent the last six years. He also logged 2.5 years as the COO of the payments company Square. Rabois said he resigned from that role due to accusations of sexual harassment made against him by a Square employee, which he denied. (Square said at the time that it hadn’t found evidence to support any claims but that Rabois “exercised poor judgment” nevertheless.)

At Khosla, Rabois helped take public the money transfer firm company Xoom (later acquired by PayPal) and Yelp, whose founder, Jeremy Stoppelman, was also an early PayPal employee who’d served as its VP of engineering.

In fact, Rabois had resigned from a director role with Yelp in 2014 to focus on the privately held startups he was working with at Khosla, ultimately leading the Series A round of the lending company Affirm (started by yet another PayPal co-founder, Max Levchin); participating in the seed round of the food delivery company DoorDash (currently trying to secure a $6 billion valuation); and coming up with the idea of and seed funding for the real estate company Opendoor, which is reportedly raising a new round at a $3.7 billion valuation.

Longstanding friendships aside, Founders Fund might need to strengthen its ranks after losing some key members in recent years.

Nosek left in 2017 to start a new firm called Gigafund in Austin, Tex., whose initial focus was reportedly to fundraise for SpaceX and SpaceX alone. Geoff Lewis, who separately spent five years as a partner at Founders Fund, also left in 2017 to form his own firm. Called Bedrock, the New York-based firm focuses on companies at the A through C stages.

Howery looks to be out the door soon, too. In October, Donald Trump nominated him to become the U.S. ambassador to Sweden. He’s still awaiting his Senate confirmation hearing.