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While at SocialNet, Hoffman was a member of the board of directors during the founding of PayPal, an electronic money transmission service. In January 2000, he left SocialNet and joined PayPal full-time as the company’s COO. Allen Blue, whom Hoffman hired at PayPal, said that “PayPal had to scratch and claw for every advantage it had, and Reid became an expert at competing effectively in an extremely competitive environment.” Hoffman was responsible for all external relationships for PayPal, including payments infrastructure (VISA, MasterCard, ACH, WellsFargo), business development (eBay, Intuit, and others), government (regulatory, judicial), and legal. Peter Thiel, Hoffman’s boss at PayPal, has said that Hoffman “was the firefighter-in-chief at PayPal. Though that diminishes his role because there were many, many fires.” At the time of PayPal’s acquisition by eBay for $1.5B in 2002, he was executive vice president of PayPal.
