Technology and Venture Capitalism by Peter Thiel

Peter Thiel

"The globalization story without technology simply does not work."

- Peter Thiel

An investing genius, Peter Thiel is perhaps one of the most successful venture capitalist in the tech industry. He is Prominently known as the co-founder of PayPal, the electronic payment site, and the first angel investor of Facebook.

Thiel has acquired a reputation as one of the most influential Silicon Valley figures. He is a self-confessed libertarian with a developed competitiveness and intellectual skills in chess.

Early Life

Peter Andreas Thiel was born on October 11th, 1967 to German parents in Frankfurt am Main, West Germany. While a child, he moved to America with his parents, and was raised in Foster City, California. Thiel studied 20th-century philosophy as an undergraduate at Stanford University. He received his B.A. in Philosophy from Stanford in 1989 and acquired a J.D. from Stanford Law School in 1992.

Thiel founded The Stanford Review - the school's main conservative paper in 1987 along with Norman Book. The Stanford Review became famous for challenging campus mores including political correctness and laws against hate speech. As a student at Stanford, Thiel formed friendships with other students, as well as those who contributed to the Stanford Review. These include David O. Sacks, and Reid Hoffman.

After graduating, Thiel clerked for Judge J.L. Edmondson of the United States Court of Appeals for the 11th Circuit. From 1993 to 1996, he traded derivatives for Credit Suisse Group. After four years of practicing law, in 1996, he co-founded Thiel Capital Management, his first major financial venture before Confinity.

Confinity was a cryptography and Palm Pilot payments company. In March 2000, Confinity merged with a financial services company. Both companies included email payments as a feature of their services, and this would be the focus of the new merged company, PayPal.


In 1998 Thiel co-founded PayPal, an online payments system, with Max Levchin. PayPal was one of the first companies to use a "human verification system" by making users enter numbers from a blurry picture (CAPTCHA).

In February 15th, 2002, PayPal went public. And on the same year in October, the company was sold to eBay for $1.5 billion. At that time, PayPal had previously been the payment method of choice by more than 50 percent of eBay users. Thiel's 3.7 percent stake in PayPal was worth approximately $55 million at the time of the acquisition.

Clarium Capital

After selling PayPal to eBay, Peter Thiel launched Clarium Capital, an American investment management and hedge fund company that pursues a global macro strategy. Clarium's assets under management grew to $8 billion in 2008 after which a series of unprofitable investments and client redemptions resulted in its assets declining to around $350 million in 2011. The company was headquarters from San Francisco before moving to New York City.

The company's activities were temporarily put on hold while Thiel worked at PayPal, and then activities resumed in 2002.

In June 2010, Thiel closed the New York office to consolidate the company and its employees into one location at its San Francisco office. The firm has continued to struggle with bets that it made on inflation and the US dollar.


In August 2004, Thiel made a $500,000 angel investment in the social network Facebook. This was the first outside investment in Facebook.

Peter Thiel met Mark Zuckerberg and Sean Parker with Reid Hoffman reference. Thiel and Zuckerberg got along well and Thiel agreed to lead Facebook's with a $500,000 investment for 10.2 percent of the company. The investment was originally in the form of a convertible note, to be converted to equity if Facebook reached 1.5 million users by the end of 2004.

As a board member, Thiel was not actively involved in Facebook's day-to-day decision making. However, he did provide help with timing the various rounds of funding.

Facebook's went public on May 2012 with a market cap of nearly $100 billion ($38 a share). At that time, Thiel sold 16.8 million shares for $638 million. In August 2012, immediately upon the conclusion of the early investor lock out period, Thiel sold almost all of his remaining stake for between $19.27 and $20.69 per share for a total of more than $1 billion. He still retained 5 million shares and a seat on the board of directors.

In November 2017, Thiel sold 73 percent (160,805) of his Facebook stake for $29 million.

Founder Fund

In 2005, Thiel created the Founders Fund with 5 other partners. Founders Fund is a fund for angel investments and venture capital investments based is San Francisco. The firm was organized by Peter Thiel and Ken Howery in early 2005 and raised its first fund of $50 million from entrepreneurs and angel investors. In 2006, Sean Parker and Luke Nosek joined as managing partners.

In 2010, the firm raised its third suite of funds, with $250 million in committed capital, and in 2011, a fourth suite of funds with $625 million of committed capital was raised. Founders Fund has launched four suites of funds to date with more than $1 billion in aggregate capital under management.

Peter Thiel individually and through his venture capital fund has made early-stage investments in numerous startups, including LinkedIn, Friendster, Quora, Booktrack, Slide, Yammer, Yelp, Inc., and many others. Fortune magazine reports that Thiel and other PayPal alumni have founded and invested in dozens of startups with an aggregate value of around $30 billion. In Silicon Valley circles, Thiel is referred to as the "Don of the PayPal Mafia", and his views on management are highly regarded.

After co-founding Founders Fund, Thiel also co-founded Valar Ventures with Andrew McCormack and James Fitzgerald; and Mithril Capital with Jim O'Neill and Ajay Royan.

In 2015, it was announced that Thiel joined Y Combinator.


Peter Thiel carries out most of his philanthropic activities through a nonprofit foundation created by him called the Thiel Foundation. Thiel concentrates his philanthropic efforts on what he sees as potential breakthrough technologies.

He believes in the importance and desirability of a technological singularity.

Thiel serves as a supporter of the Committee to Protect Journalists, a group that promotes press freedom worldwide; the Singularity Institute for Artificial Intelligence, which seeks to foster the responsible development of advanced computing technologies; and the SENS Foundation, a medical charity dedicated to extending healthy human lifespans. Peter remains active at his almamater, and has taught at Stanford Law School, in addition to serving on the Board of Overseers of the Hoover Institution at Stanford.

On September 29, 2010, he created the Thiel Fellowship, which annually awards $100,000 to 20 people under the age of 20 to help them create their own ventures.

Awards And Honors

Throughout his career, Peter Thiel has received numerous awards. These include the Herman Lay Award for Entrepreneurship in 2006. In 2007, Thiel was honored as a Young Global leader by the World Economic Forum as one of the 250 most distinguished leaders age 40 and under.

On November 7, 2009, Thiel was awarded an honorary degree from Universidad Francisco Marroquin. In 2012, Students For Liberty, an organization dedicated to spreading libertarian ideals on college campuses, awarded Thiel its "Alumnus of the Year" award, and Thiel delivered the keynote address at the 2012 International Students For Liberty Conference.

Thiel was the co-producer of "Thank You for Smoking", a 2005 feature film based on a 1994 novel of the same name.

Personal Life And Wealth

As a loner of sorts, Peter Thiel dreams of a technological world where everyone has a robot driven cars and people live twice longer. Thiel likes to spend his time in coffee shops and regularly has intelligent discussions with his friends over dinner at his house that sits between the Presidio and the bay in San Francisco. Thiel is also math genius and a national level chess player.

In May 2016, Thiel was among the people in the Gawker Media lawsuit. He confirmed in an interview that he had paid $10 million in legal expenses to finance several lawsuits brought by others, including a lawsuit by Terry Bollea (Hulk Hogan) against Gawker Media that publicly made sections of a sex tape of Bollea with a married woman. The lawsuit has made Gawker to file bankruptcy protection.

Thiel is a gay, and he has actively supported gay rights causes.

Thiel is also a devoted libertarian and a member of the Libertarian Party until 2016. He has contributed to Libertarian and Republican candidates and causes.

As of 2017, Thiel has a net worth of $3.2 billion.