Peter Thiel‘s career spans founding one of the most successful startups of the dotcom era, investing early in monumental successes like Facebook, and funding radical ideas that could reshape our future. Read on to learn all about this fascinating billionaire‘s climb to the top echelons of tech, his unconventional perspectives, and his lasting impact on Silicon Valley and beyond.
Early Life and Education
Born in 1967 in Frankfurt, Germany to middle-class parents, Peter Thiel displayed all the hallmarks of a wildly gifted child from a young age. His father, Klaus Friedrich Thiel, worked as a chemical engineer. Peter moved frequently as a child, living in Namibia, South Africa, and later Ohio before settling in California at age 10.
Shy and awkward, the young Thiel preferred chess, strategy books, and Tolkein to socializing. Though this made him a target for bullies during his childhood, Thiel‘s intellectual gifts would later open doors to the world‘s most elite education.
Thiel attended Stanford University, where he plunged into the study of philosophy, graduating with a B.A. in 1989. He pursued this interest further at Stanford Law, earning a Doctor of Jurisprudence degree in 1992.
During his time at Stanford, Thiel honed his writing and critical thinking skills as one of the founders of the Stanford Review, an independent newspaper started by disaffected students to challenge Stanford‘s political correctness. The Review provided an early outlet for Thiel‘s libertarian political leanings.
Trading and First Ventures
After graduating Stanford, Thiel took jobs clerking for a federal judge and practicing securities law at a Manhattan firm. But the corporate lawyer lifestyle failed to satisfy this future billionaire, and within 7 months he had left to start trading derivatives at Credit Suisse.
In 1996, drawing on knowledge gained from his short Wall Street career, Thiel started a small hedge fund called Thiel Capital Management. Though managing less than $1 million initially, mostly from friends and family, Thiel‘s fund delivered investors 57% returns in its first seven months by shorting the rallying dot-com bubble.
PayPal: The First Billion-Dollar Baby
In 1998, a lecture Thiel delivered at Stanford led to a fateful meeting with Max Levchin, an entrepreneur developing encryption software. Sensing a huge opportunity, Thiel invested in Levchin‘s startup idea under the parent company Confinity.
The initial idea was to enable handheld PDA devices to wirelessly transfer money. However, Thiel helped recognize that email could become the disruptive new platform for online payments. Confinity launched PayPal in 1999, facilitating transfers using email addresses. Revenue grew rapidly from $86,000 in 1999 to $32 million in 2000.
Meanwhile, a competing startup called X.com, founded by Elon Musk in 1999, was also gaining traction in online payments and merged with Confinity in 2000. Thiel impressed the board sufficiently to be appointed CEO of the new company, which adopted the name PayPal.
PayPal went public in February 2002 and was acquired by eBay for a staggering $1.5 billion just months later. Thiel walked away with $55 million for his early stake. PayPal‘s success cemented Thiel‘s reputation in Silicon Valley as a visionary leader.
Doubling Down on Success
Flushed with cash from the PayPal sale, Thiel immediately founded a new hedge fund called Clarium Capital Management. The new fund made big and risky bets – for example, correctly predicting the 2008 oil shock and profiting handsomely. Clarium‘s assets ballooned to over $8 billion but eventually declined substantially after several poorly-timed bets.
In 2004, tapping into his Stanford network yet again, Thiel invested $500,000 in Facebook for a 10% ownership stake. That ended up being one of the most lucrative investments in history – today that stake would be worth over $10 billion!
Other companies Thiel spotted early include:
Palantir (2004) – Data analytics company now worth over $22 billion
SpaceX (2005) – Provided critical early funding of $100 million to Elon Musk‘s rocket company
Spotify (2008) – Invested €1.5 million in the music streaming startup while still private
Airbnb (2009) – Backed the vacation rental disruptor‘s seed round, stake now worth billions
Unconventional Investing: Founders Fund
In 2005, Thiel launched Founders Fund, a VC firm focused on highly ambitious companies aiming to revolutionize entire industries. The fund‘s slogan is "We wanted flying cars, instead we got 140 characters" – referring to Twitter.
Some of Thiel‘s moonshot investments through Founders Fund include:
Halcyon Molecular – Developing a "molecular DNA sequencer" device to sequence human genomes rapidly and cheaply
SpaceX – Ambitious private space exploration aspiring to make humans multi-planetary
Stemcentrx – Developing cancer therapies by targeting tumor stem cells
Xoom – Disrupting money transfers with online remittances (acquired by PayPal for $890 million)
Planet Labs – Launching the world‘s largest constellation of Earth-imaging satellites
Founders Fund has also backed hugely successful startups like Lyft, Affirm, and Stripe early in their journeys.
Thiel‘s investing success stems from recognizing potential in wildly ambitious ideas that offer "10x" improvement rather than small iterations. He bets on disrupting monopolies and is comfortable with high risk.
True to his libertarian roots, Thiel firmly believes technology flourishes best in free markets with minimal government intervention. He has contributed over $7 million to political campaigns supporting Republican candidates aligned with this worldview, though Thiel denounces blind partisan loyalty.
Thiel spoke at the 2016 Republican National Convention in support of Donald Trump‘s candidacy. However, he has criticized both major parties for their lack of meaningful solutions and reliance on tribalism.
In his writing and speeches, Thiel consistently advocates for individuals thinking critically for themselves rather than succumbing to herd mentalities. He sees political correctness and cancel culture as inimical to free debate and exchange of ideas.
Philanthropy: Supporting Cutting-Edge Science
The Thiel Foundation supports revolutionary scientific research with the potential to radically improve human civilization. Thiel believes we should pursue ideas that seem impossible today but may transform the world if successful.
Some of Thiel‘s philanthropic contributions include:
$3.5 million to the Methuselah Foundation, which seeks to extend human lifespans through advances in tissue engineering.
$667,320 to the Machine Intelligence Research Institute, which studies how to ensure artificial intelligence remains safe and beneficial to humanity.
$4.2 million to the SENS Research Foundation, which aims to cure age-related diseases by repairing the underlying cellular damage that causes them.
Thiel also started the Thiel Fellowship in 2010, which awards $100,000 grants to students under 20 who drop out of college to build new companies instead. Though controversial, this program aimed to incentivize outside-the-box thinking.
In addition to his prolific funding of tech ventures, Thiel has also made notable contributions as an author and public intellectual.
Published in 1998, Thiel‘s first book The Diversity Myth (co-written with David O. Sacks) criticizes political correctness and declining academic rigor at elite universities like his alma mater Stanford. The provocative work generated fierce debate on freedom of thought versus discriminatory practices.
In 2014, notes from a Stanford entrepreneurship seminar Thiel taught were compiled by student Blake Masters into the runaway bestseller Zero to One. The book elucidates Thiel‘s philosophy of how to build truly transformative companies through technological innovation. It has become a canonical text for aspiring startup founders.
Thiel also frequently contributes articles to newspapers and magazines like the New York Times and Wall Street Journal commenting on issues related to technology and the economy.
Peter Thiel has an estimated net worth of $4.3 billion as of May 2023 according to Forbes. His early stakes in companies like PayPal and Facebook account for a substantial portion of his wealth. Thiel also owns large equity shares in his funds and other private technology companies.
Thiel possesses one of the world‘s most successful Roth IRA accounts. He opened the account in 1999 with the maximum $2,000 contribution then invested it in 1.7 million shares of PayPal equity prior to PayPal‘s IPO. That stake is now worth billions, allowing the Roth IRA to reach gargantuan proportions tax-free.
Since 2017, Thiel has been married to long-time partner Matt Danzeisen, after privately identifying as gay for decades. The couple lives in Los Angeles with their dogs.
Honors and Impact
Among his many honors, Peter Thiel was named to the World Economic Forum‘s list of Young Global Leaders in 2007 and awarded the prestigious Herman Lay Award for Entrepreneurs in 2006. He has several honorary degrees and a net worth reaching billions.
But perhaps Thiel‘s greatest impact has been in reshaping Silicon Valley‘s investment landscape. He proved that huge wins lie in funding transformational companies, even if success seems improbable. Thiel also set the valley on course to chase big ideas by investing early in foundational companies like Facebook and Palantir. And many see his support of radical life extension research as visionary.
Peter Thiel overcame early setbacks and detractors to rise to the apex of tech success. Driven by relentlessly pursuing his radical ideas, this pioneering thinker has left an indelible mark on technology and society. When asked how to succeed like him, Thiel boiled it down to a simple formula: "Don‘t just start companies; reimagine industries."