Entrepreneurship

MGT403 Entrepreneurship

Dr. Paul Rux

SLP Module 5 – Case study

Write a three to four page (excluding title page and references) paper answering the following question:

If you had been in charge, how would you have handled PayPal's IPO process differently?

If I had been in charge of PayPal’s IPO process two things quickly come to mind that I would have done differently, the first would be to have a team of lawyers thoroughly investigate infringement and patent laws of similar companies; second being worker confidentiality and communication/security laws . While the merger of pay pal was still in its infancy stage I would have worked closely with the legal team to ensure these two areas were at the top of the list; with heavy consequences if they were not adhered to.

The current incarnation of PayPal is the result of a March 2000 merger between Confinity and X.com. Confinity was founded in December 1998 by Max Levchin, Peter Thiel, Luke Nosek, and Ken Howery, initially as a Palm Pilot payments and cryptography company. X.com was founded by Elon Musk in March 1999, initially as an Internet financial services company. Both Confinity and X.com launched their websites in late 1999. Both companies were located on University Avenue in Palo Alto. Confinity's website was initially focused on reconciling beamed payments from Palm Pilots with email payments as a feature and X.com's website initially featured financial services with email payments as a feature.

In spite of first day performance of the company’s stock, PayPal’s IPO was plagued with problems. One of the issues was the patent infringement case filed against the company by CertCo. Inc, which was a New York-based competitor, regarding PayPal’s use of the company’s patented product.

These problems before and after the IPO of PayPal were the major factors for the creators of the company to finally agree on selling the company to eBay. Hence, if I have...