How Peter built the fortune
Peter Thiel's wealth comes from a short list of very large bets. The first was PayPal. In 1998 he co-founded Confinity with Max Levchin and Luke Nosek, a company that built a way to send money between handheld devices and then by email. In 2000 it merged with X.com, the online bank started by Elon Musk, and the combined company took the PayPal name. Thiel served as chief executive, took the company public in early 2002 and sold it to eBay later that year, collecting a sizable payout that he used as the seed for everything that followed.
The second and most famous bet came in 2004, when he invested about 500,000 dollars in a young social network called TheFacebook in exchange for a stake of around ten percent and a board seat. It made him Facebook's first major outside investor. He sold most of his shares after the company went public in 2012, producing one of the most successful early stage investments on record.
The third pillar is Palantir Technologies, the data analysis company he co-founded around 2003 with Alex Karp and others, initially to apply ideas from PayPal's fraud detection to intelligence and defense work. Palantir listed on the New York Stock Exchange in 2020, and its share price later rose sharply as governments and corporations adopted its software, including for artificial intelligence projects. Thiel remains one of its largest shareholders and its chairman. Taken together, PayPal supplied the starting capital, Facebook multiplied it, and Palantir became the largest single holding in his portfolio.
Companies and holdings
His investments run through several vehicles:
- Founders Fund, the San Francisco venture firm he started in 2005, which has backed companies such as SpaceX, Airbnb, Stripe and Anduril.
- A large stake in Palantir Technologies.
- Thiel Capital, his personal investment office, and earlier Clarium Capital, a macro hedge fund he ran in the 2000s.
- Positions in other firms he helped start or fund, including Mithril Capital and Valar Ventures.
He was also an early investor in LinkedIn and sat on Facebook's board until 2022.
Founders Fund became known for backing companies working on hard technical problems, such as rockets, defense systems and biotechnology, in line with Thiel's argument that the technology industry had focused too much on consumer apps. Several of its funds have produced large gains, which add to his personal returns as a general partner.
Early life and career
Thiel was born in Frankfurt, West Germany, in 1967, and moved to the United States as a small child. His family lived for a time in South Africa and what is now Namibia, where his father worked as an engineer on mining projects, before settling in Foster City, California. He was a highly ranked junior chess player and a strong mathematics student.
He studied philosophy at Stanford University, where in 1987 he co-founded The Stanford Review, a student newspaper with a conservative and libertarian outlook. He then earned a law degree from Stanford Law School. After clerking for a federal appeals judge, he worked briefly as a securities lawyer at Sullivan and Cromwell in New York and then as a derivatives trader at Credit Suisse, before returning to California to start a small investment fund. That fund, and his network of former Stanford classmates, led directly to Confinity.
Philanthropy and public life
Thiel is one of the most outspoken and politically active figures in American technology. He spoke at the 2016 Republican National Convention in support of Donald Trump and has funded several conservative political candidates. He also secretly financed the invasion of privacy lawsuit brought by Hulk Hogan that bankrupted the gossip site Gawker in 2016, which he later acknowledged and defended.
His best known program is the Thiel Fellowship, launched in 2011, which gives young people a grant on the condition that they leave or skip college to pursue a project or company. Through the Thiel Foundation he has also funded research into life extension, artificial intelligence safety and free speech causes. He is the author, with Blake Masters, of the 2014 book Zero to One, based on a course he taught at Stanford on startups. He became a citizen of New Zealand in 2011, a fact that drew controversy when it became public several years later.