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Peter Andreas Thiel

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Peter Andreas Thiel's Social Links

Profile

Peter Andreas Thiel was born October 11, 1967, in Frankfurt am Main, West Germany. Known as one of the smartest entrepreneurs and investors of the Silicon Valley, Thiel belongs to an exclusive “club” that includes friends Reid Hoffman, Sean Parker, Elon Musk, Mark Pincus and other “stars” of the valley.

Peter’s family moved to the USA when he was a toddler and he grew up in Foster City, California. There Thiel become a US-rated Chess Master for the under-21 category. His chess board had a sticker on it that read “Born to Win!”

After high school, Thiel entered Stanford University to study philosophy. While there, he and Norman Book started “The Stanford Review” newspaper, which reflected his libertarian convictions and railed against hate speech and political correctness.

Some of the friends Thiel made during his “The Stanford Review” days were Keith Rabois (Square), David O. Sacks (Yammer) and Reid Hoffman (LinkedIn). Some of these friends later took jobs at PayPal, Thiel’s start-up and became what was then known as the “PayPal Mafia.”.

Believing he wanted to be a lawyer, he went to Stanford Law School and received a J.D. degree in 1992.

Trying to find his way, Thiel clerked for a judge at the US Court of Appeals and then in a change of direction, traded securities for Credit Suisse until 1996. That same year, he founded Thiel Capital Management.

In 1998, he and friend Max Levchin founded Confinity. A little later, that was merged with Elon Musk’s X.com. That became PayPal. PayPal was struggling on several fronts. Visa was wary of PayPal and felt threatened by it. PayPal could not survive without Visa.

Also, Ebay was promoting its own electronic pay system, Billpoint, which also could have driven Paypal out of business. Thiel dispatched Reid Hoffman (COO) to Visa to calm Visa’s fears. He did and this bought PayPal badly needed time.

On February 15, 2002, PayPal went public, raising $70 million the first day. This was pretty impressive for a company that was nearly broke a few months before. After 5 attempts and 5 months after the IPO, eBay bought PayPal. Thiel's stake in PayPal was worth approximately $55 million at the time of the acquisition.

With that money, Thiel started Clarium Capital Management. In 2005, MarHedge and Absolute Return, two trade magazines, honored Clarium as global macro fund of the year. Clarium lost a huge amount of money in 2008 to 20011 and is staging a come-back.

In August of 2004, Thiel made his most fortuitous investment to date. Sean Parker, former founder of Napster and Plaxo, was President of Facebook and was looking for investors. Parker approached Reid Hoffman (now CEO of LinkedIn) but Hoffman declined to “lead the investment” because he saw a conflict (though he and Mark Pincus did invest later) and he pointed him in Thiel’s direction. Thiel and Hoffman were friends from PayPal and part of the so-called “PayPal Mafia.”

Parker introduced Thiel to Mark Zuckerberg, founder of Facebook and they got along well. Mark controlled Facebook (thanks to structuring by Parker) and could make all decisions. Thiel agreed to give Zuckerberg $500,000 in the form of a convertible note that would turn to equity if Facebook hit 1.5 million members. Zuckerberg barely missed that number at the end of 2004 but Thiel agreed to take the equity anyway. It came to 10.2% of Facebook.

When Facebook had their IPO in May of 2012, the market cap was nearly $100 billion ($38 per share). Thiel immediately sold 16.8 million shares for $638 million. After the investor lockout in August 2012 passed, he sold almost his entire remaining stake for between $19.27 and $20.69 per share, or $395.8 million. His total take was more than $1 billion. Thiel still retained 5 million shares and a seat on Facebook’s board of directors.

Thiel created Founders Fund in 2005. Its purpose was for angel and early stage venture investments. Other partners are Sean Parker, Ken Howery, and Luke Nosek.

Some of the investments Thiel made through the fund or on his own have been Booktrack, Slide, LinkedIn, Friendster, Rapleaf, Geni.com, Yammer, Yelp, Powerset, Practice Fusion, MetaMed, Vator, Palantir Technologies, Iron Port, Votizen, Asana, Big Think, Caplinked, Quora, Rypple, Stripe, and Legendary Entertainment.

In February 2013, Thiel received a TechCrunch “Crunchie Award” Award for Venture Capitalist of the year.

Forbes Magazine estimates Peter Thiel’s net worth at $1.6 billion dollars in March 2013.

Companies and Investments

Confinity, PayPal, Facebook, Friendster, LinkedIn, Yelp, Rapleaf, Geni.com, Palantir, Votizen and many others.

Lessons Learned

People don't want to believe that technology is broken. Pharmaceuticals, robotics, artificial intelligence, nanotechnology - all these areas where the progress has been a lot more limited than people think. And the question is why.

Inspiring Quotes

There is no such thing as society. There are individual men and women.

Margaret Thatcher

Peter Andreas Thiel's Quotes

I believe we are in a world where innovation in stuff was outlawed. It was basically outlawed in the last 40 years - part of it was environmentalism, part of it was risk aversion

Peter Andreas Thiel

Had the people who started Facebook decided to stay at Harvard, they would not have been able to build the company, and by the time they graduated in 2006, that window probably would have come and gone.

Peter Andreas Thiel

I believe we are in a world where innovation in stuff was outlawed. It was basically outlawed in the last 40 years - part of it was environmentalism, part of it was risk aversion.

Peter Andreas Thiel

In a world where wealth is growing, you can get away with printing money. Doubling the debt over the next 20 years is not a problem.

Peter Andreas Thiel

I think anything that requires real global breakthroughs requires a degree of intensity and sustained effort that cannot be done part time so it is something you have to do around the clock and that does not compute with our existing educational system.

Peter Andreas Thiel

Influential Books

J.R.R. Tolkien - J.R.R. Tolkien 4-Book Boxed Set: The Hobbit and The Lord of the Rings (Movie Tie-in): The Hobbit, The Fellowship of the Ring, The Two Towers, The Return of the King

Mentors

Margaret Thatcher

References


Technical

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