Original Article Title: No Rivals
Original Article Author: Mario Gabriele, The Generalist Podcast

Translation by: Lenaxin, ChainCatcher
Release Date: July 8, 2025

Abstract:

TL&DR

· The key to success lies in being different

· Founders Fund manages billions of dollars in assets

· He can foresee the game twenty steps ahead and strategically position key pieces

· Brilliant and unconventional, willing to explore conclusions that most shy away from

· Since a mid-1998 Stanford speech, the three founders of Founders Fund officially met

· Thiel's strength lies in strategy rather than execution

· Chasing macro investment achievements, systematic venture capital practices, and simultaneously founding new companies are all successful enterprises in different ways—attaining a monopolistic position by solving unique problems

· All failed enterprises are the same, failing to escape competition. "He comes from a hedge fund background, always looking to cash out and exit." Moritz evaluates Thiel

ChainCatcher Editor's Note:

This article, sourced from the No Rivals podcast, fully presents how the Founders Fund, from a small side project, evolved into one of Silicon Valley's most influential and controversial companies. It deeply analyzes Peter Thiel's venture capital empire, including the origin story, how Peter Thiel built an extraordinary investor team, how the fund's concentrated bets on SpaceX and Facebook brought astonishing returns, and how Peter Thiel's contrarian philosophy reshaped the venture capital industry and American politics.

This report is based on exclusive performance data and key personnel interviews obtained by The Generalist Podcast, revealing how the institution set the best return record in the history of venture capital. The podcast consists of four parts in total, and this is the first part.

Prophet

Peter Thiel is nowhere to be seen.

On January 20, to escape a harsh winter storm, the most powerful people in America gathered beneath the dome of the Capitol to celebrate the inauguration of Donald J. Trump as the 47th President.

If you have even a passing interest in tech and venture capital, looking back at the photos from this event, it's hard not to think of Thiel. He may not have been present, but he was everywhere.

His former employee (the current Vice President of the United States) was there; a few steps away stood his old partner from the Stanford Review (the new AI and cryptocurrency czar in the Trump administration); sitting a little further was his earliest angel investment (Meta's founder and CEO); and next to him was his frenemy collaborator: the founder of Tesla and SpaceX, the world's richest person, Musk.

While it might be an exaggeration to say that all of this was orchestrated by Peter Thiel, the former chess prodigy's career has always showcased astonishing talent: he could foresee the board 20 moves ahead and strategically position key pieces: moving the JD to B4, pushing Sacks to F3, placing Zuck at A7, positioning ElonMusk at G2, and guarding Trump on E8.

He navigated the core of power, including New York's financial realm, Silicon Valley's tech sphere, and Washington's military-industrial complex; his actions were always cautious and unconventional, making him elusive; he often mysteriously disappeared for months, only to reappear suddenly, throwing out a sharp witticism, a perplexing new investment, or an engrossing revenge plot. At first glance, these actions may seem like mistakes, but over time, they reveal his extraordinary foresight.

Founders Fund is the core of Thiel's power, influence, and wealth. Established in 2005, it has grown from a $50 million fund with an inexperienced team to a Silicon Valley giant managing billions of dollars in assets, boasting a top-tier investment team. Its image is controversial, akin to the "bad boys' club" of the early 1990s.

The performance data attests to Founders Fund's brash style. Despite the fund's continued growth, its concentrated bets on SpaceX, Bitcoin, Palantir, Anduril, Stripe, Facebook, and Airbnb have consistently yielded astounding returns. The three funds in 2007, 2010, and 2011 set a record in venture capital history with an exceptional performance trilogy: starting with $227 million, $250 million, and $625 million in capital respectively, achieving total returns of 26.5 times, 15.2 times, and 15 times, respectively.

Contemporaries have described Talleyrand's smile as "paralyzing," and even the chatterbox salon hostess Madame de Staël exclaimed, "If his conversations could be bought, I would bankrupt myself to acquire them."

Peter Thiel seems to possess a similar charm. When retracing the origins of Founders Fund, his presence is repeatedly highlighted. Encountering Peter Thiel by chance often leaves listeners spellbound: some have relocated to be closer to him, some have given up prestigious positions just to immerse themselves further in his "eccentric" ideas.

Whether on stage at a conference or in rare podcasts, listening to Thiel speak, you'll find that his charm doesn't stem from a diplomat's smooth talk. Instead, his charm comes from a multifaceted ability to gracefully dance through different topics, using the profound knowledge of a Trinity College professor to eloquently expound.

Who else could seamlessly navigate through discussions on Socrates, Fermat's Theorem, and Ted Kaczynski, write a seminal work on startups, argue for the virtue of monopolies, and advocate for running a business akin to a cult? How many other minds encompass this rigor and non-religiosity?

Ken Howery and Luke Nosek had already succumbed to this charm of Peter Thiel several years before co-founding Founders Fund in 2004. Ken Howery's "conversion moment" occurred during his undergraduate years studying economics at Stanford. In Thiel's 2014 business philosophy book "Zero to One," he describes Howery as the "only member of the PayPal Mafia who fits the stereotypical American privilege mold, the company's lone Eagle Scout." This young Texan moved to California in 1994 to study and began writing for the conservative student publication "Stanford Review," which Thiel had co-founded seven years earlier.

The first meeting between Peter Thiel and Ken Howery took place at a "Stanford Review" alumni event. As Howery ascended to become the senior editor, the two stayed in touch. On the eve of this young Texan's graduation, Thiel extended an olive branch: would he be willing to become the first employee of his new hedge fund? He suggested the two meet for an in-depth discussion at the Palo Alto steakhouse Sundance.

Howery quickly realized this was no ordinary recruitment dinner. During a four-hour intellectual odyssey, the young Thiel exhibited an all-encompassing charm. "From political philosophy to entrepreneurial ideas, his insights on every subject were more captivating than anyone I had encountered in my four years at Stanford; the breadth and depth of his knowledge were awe-inspiring," Howery recalled.

Although no commitment was made on the spot, that evening back on campus, Howery confessed to his girlfriend, "I may end up working with this person for the rest of my life."

The only obstacle was Howery's original plan to move to New York for a high-paying position at Bahrain Bank (ING Barings). In the following weeks, he sought advice from family and friends on whether to choose a prestigious investment bank or follow a newly minted investor with less than $4 million under management. "Everyone 100% advised me to choose the bank, but after thinking it over for a few weeks, I decided to go the other way," Howery said.

Prior to graduation, while attending a campus lecture by the new boss, a young man with curly brown hair named Luke Nosek suddenly leaned over and asked, "Are you Peter Thiel?"

"No, but I'm about to work for him," Howery replied. The young man, who introduced himself as Luke Nosek, handed over a business card with only "Entrepreneur" printed on it. "It's for the company I founded," Nosek explained. At the time, Nosek was working on the Smart Calendar, one of the many emerging electronic calendar applications that Thiel had already invested in.

This interaction brought up a perplexing question: How could Nosek forget his supporter, someone he had shared breakfast with a few times? Perhaps their last meeting had been a long time ago, or perhaps this quirky, enthusiastic founder simply didn't care about the investor's face. Or perhaps, Thiel had simply been momentarily forgotten.

Thiel saw in Nosek the ideal prototype of talent: brilliant yet unconventional, daring to explore conclusions that most shy away from considering. This powerful mind, free thinking, and disregard for social norms aligned perfectly with Thiel's values. Thiel quickly followed in Nosek's footsteps and signed up with the human cryopreservation organization Alcor.

Since a mid-1998 Stanford speech, the three founders of Founders Fund have officially met. Although the three took another seven years to establish their respective venture capital funds, a deeper level of collaboration began immediately.

Spite Store

"I'm Larry David, and I want to introduce everyone to the soon-to-be-opened Latte Larry's coffee shop." In the opening scene of the 19th episode of "Curb Your Enthusiasm," the creator of "Seinfeld" says, "Why coffee? Because the guy next door is an asshole, so I had to do something, and I opened a spite store for myself."

This gave rise to the cultural term "Spite Store" — implementing commercial retaliation by competing for customers.

To some extent, Founders Fund is Peter Thiel's "Spite Store." While Mocha Joe, the sarcastic guy, inspired Larry David, Thiel's actions can be seen as a response to Sequoia Capital's Michael Moritz. Moritz, a former Oxford graduate journalist turned investor, is a legendary figure in the venture capital world, responsible for early investments in Yahoo, Google, Zappos, LinkedIn, and Stripe.

Moritz is a literary-spirited investment guru who has been a stumbling block in Thiel's early entrepreneurial history.

The story began with PayPal: that same summer, Thiel met Ukrainian-born entrepreneurial genius Max Levchin. He graduated from the University of Illinois, where he had developed a profitable encryption product for PalmPilot users. After hearing the pitch, Thiel said, "This is a good idea, I want to invest."

Thiel immediately decided to invest $240,000. This underestimated decision eventually brought a $60 million return and marked the beginning of the most turbulent entrepreneurial epic of the internet era. (This story is extensively explained in the book "The Founders.")

Levchin quickly recruited the failed entrepreneur Nosek. Thiel and Howery then joined full-time, with Thiel as CEO. The addition of talent such as Reid Hoffman, Keith Raboy, David Sachs, and others created the most luxurious entrepreneurial lineup in Silicon Valley history.

The company, originally named Fieldlink (later renamed Confinity), soon found itself in direct competition with Elon Musk's X.com. To avoid a war of attrition, the two companies chose to merge, combining Confinity's most popular email addresses and payment connections with X.com to form the new company named "PayPal."

This merger not only required merging two stubborn management teams but also accepting each other's investments and investors.

Moritz, who had invested in X.com, suddenly found himself dealing with a group of quirky geniuses. On March 30, 2000, the two companies announced a $100 million Series C financing round—Thiel was a strong advocate for this round, predicting an imminent economic downturn. His foresight was proven right: in a few days, the dot-com bubble burst, and many star companies collapsed.

「I want to thank Peter,」 an employee said, 「He made a judgment call and insisted that the financing had to be completed because doomsday was approaching...」

However, his insightful macro view was not enough to save the company. Thiel saw an opportunity for profit. At a 2000 PayPal investor meeting, Thiel made a suggestion: if the market was truly going to drop further as he expected, why not short it? PayPal only needed to transfer its additional $100 million funding to Thiel Capital International, and he would take care of the rest.

Moritz was furious and said, 「Peter, it's simple,」 a director recalled the Sequoia investor's warning, 「If the board approves this proposal, I will resign immediately.」 Thiel struggled to understand this stubborn reaction, as the fundamental disagreement was Moritz's desire to do the right thing while Thiel wanted to be the right person. Finding common ground between these two epistemological extremes was not easy.

In the end, both sides suffered: Moritz successfully blocked Thiel's plan, but Thiel's foresight was entirely correct. After the market crash, an investor admitted, 「If we had shorted at that time, the profit would have exceeded all of PayPal's operating income.」

This boardroom conflict exacerbated the distrust between the two, and a power struggle months later led to a complete rupture. In September 2000, led by Levchin, Thiel, and Scott Bannister, PayPal employees staged a coup to oust CEO Elon Musk (having just ousted interim CEO Bill Harris). Musk refused to compromise, and Thiel's rebel forces had to persuade Moritz to approve Thiel taking over the company. Moritz imposed a condition: Thiel could only serve as interim CEO.

In fact, Thiel had no intention of long-term leadership at PayPal; his strength was in strategy, not execution. But Moritz's terms forced him to humiliate himself in finding a successor. It wasn't until an external candidate also expressed support for Thiel to formally become CEO that Moritz changed his mind.

This 「praise and then demotion」 power play deeply stung the vengeful genius, laying the groundwork for his future creation of Founders Fund.

Despite internal conflicts within PayPal, the company ultimately succeeded. And Thiel must acknowledge Moritz's indispensable contribution to this. When eBay proposed a $3 billion acquisition offer in 2001, Thiel advocated for acceptance, while Moritz strongly advocated for independent development.

「He came from a hedge fund background and always wanted to cash out.」 Moritz later assessed Thiel. Fortunately, Moritz convinced Levchin, and PayPal rejected the acquisition offer. Shortly after, eBay raised their offer to $1.5 billion, five times the exit price Thiel had initially suggested.

This deal made Thiel and his "mafia" members very wealthy, and Moritz's investment track record was further shining. If the two had different personalities, perhaps time could have erased the animosity, but the reality is that this was only the beginning of an ongoing war.

Clarium Phone Call

As evidenced by that rejected $100 million macro bet, Thiel never extinguished his investment passion. Even during his tenure at PayPal, he and Howery continued to manage Thiel Capital International. "We spent countless nights and weekends maintaining the fund's operations," Howery revealed.

To align with Thiel's wide-ranging interests, they pieced together a mixed investment portfolio of stocks, bonds, forex, and early-stage startups. "We completed 2-3 transactions annually on average," Howery especially noted the 2002 investment in the email security company Ironport Systems—which was acquired by Cisco for $830 million in 2007.

The $60 million windfall from the PayPal acquisition fueled Thiel's investment ambitions further. Even during a period of expanding fund size, he pursued multiple fronts: pursuing macro investment achievements, systematic VC practices, while also founding new companies. Clarium Capital became the core vehicle for these ambitions.

In the same year the PayPal acquisition was completed, Thiel began establishing the macro hedge fund Clarium Capital. "We are working hard to pursue a systematic worldview, as claimed by Soros and others," he explained in a 2007 Bloomberg personality feature.

This perfectly aligned with Thiel's cognitive traits—he naturally excelled in grasping civilization-level trends and instinctively resisted mainstream consensus. This thinking quickly demonstrated its power in the market arena: Clarium's assets under management skyrocketed from $10 million to $1.1 billion in three years. After earning a profit of 65.6% in 2003 by shorting the dollar, following a slump in 2004, they achieved a 57.1% return in 2005.

Meanwhile, Thiel and Howery began planning to systematize their scattered angel investments into a professional venture capital fund. Their performance gave them confidence: "When we looked at the portfolio, we found an internal rate of return of 60%-70%," Howery said, "and that was just from part-time and opportunistic investments. What if we operated systematically?"

After two years of preparation, Howery initiated fundraising in 2004 for an initial $50 million fund initially named Clarium Ventures. As usual, they invited Luke Nosek to join part-time.

Compared to hedge funds managing billions of dollars, $50 million seemed insignificant, but even with the PayPal founder team's halo, fundraising was extremely challenging. "It was much more difficult than expected; today, everyone has a venture capital fund, but at that time, it was very unusual," Howery recalled.

Institutional LPs showed little interest in such a small fund. Howery had hoped that Stanford University would donate to the fund as an anchor investor, but they withdrew due to the fund's small size. In the end, they only raised $12 million in external funds—mostly from former colleagues' personal investments.

Eager to get started, Thiel decided to contribute $38 million of his own money (accounting for 76% of the initial fund) to fill the gap. "The basic division of labor was Peter providing the money, and I providing the effort," Howery recalled. Given Thiel's other commitments, this division of labor was inevitable.

The 2004 Clarium Ventures (later renamed Founders Fund) inadvertently became Silicon Valley's best-positioned fund, thanks to two personal investments Thiel made before fundraising. The first was Palantir, co-founded in 2003—Thiel once again played a dual role as a founder and investor, launching the project with PayPal engineer Nathan Gettings and Clarium Capital employees Joe Lunsdale and Stephen Cohen. The following year, he invited his Stanford Law School classmate and eccentric curly-haired genius, Alex Karp, to serve as CEO.

Palantir's mission was highly provocative: drawing inspiration from the "Palantír" in "The Lord of the Rings" and using PayPal's anti-fraud technology to help users achieve cross-domain data insights. However, unlike conventional enterprise services, Thiel targeted the U.S. government and its allies as clients. "After the 9/11 attacks, I thought about how to both fight terrorism and protect civil liberties," he explained to Forbes in 2013. This government-led business model also faced fundraising challenges—investors were skeptical of the slow government procurement process.

A Kleiner Perkins executive interrupted Alex Karp's pitch directly, discussing at length why the business model was not viable; longtime rival Mike Moritz, while arranging a meeting, doodled absentmindedly throughout the entire presentation — another apparent snub at Thiel. Despite failing to impress Sand Hill Road venture firms, Palantir caught the eye of In-Q-Tel, the CIA's investment arm. "The most impressive thing about this team is their relentless focus on human-machine data interaction," remarked a former executive. In-Q-Tel became Palantir's first external investor with a $2 million investment, a move that would later bring Thiel significant financial and reputational rewards. Founders Fund subsequently invested a total of $165 million, with a stake valued at $3.05 billion as of December 2024, yielding a return of 18.5 times.

But the substantial returns would take time. Thiel's second key investment before founding Clarium Ventures saw quicker results: in the summer of 2004, Reid Hoffman introduced 19-year-old Mark Zuckerberg to his old friend Thiel. These ideological opposites but mutual admirers from their days at PayPal (Hoffman founded the social networking site SocialNet in 1997 before joining Confinity as COO) had engaged in deep discussions about social networks. When they met Zuckerberg at Clarium Capital's lavish office in the Presidio of San Francisco, they already had a mature understanding and investment determination.

"We've done extensive research in the social networking space," Thiel confessed at a Wired event, "the investment decision had nothing to do with the meeting performance — we were already committed to investing." The 19-year-old in a T-shirt and Adidas sandals displayed the "Asperger's-ish social awkwardness" that Thiel lauds in "Zero to One": neither seeking to please nor ashamed to ask about unfamiliar financial terms. This departure from imitative competition is the trait that Thiel sees as advantageous in entrepreneurs.

Days after the meeting, Thiel agreed to invest $500,000 in Facebook in the form of a convertible note. The terms were straightforward: if the user count reached 1.5 million by December 2004, the debt would convert to equity at a 10.2% stake; otherwise, Thiel had the right to withdraw the funds. Despite missing the target, Thiel chose to convert — this conservative decision ultimately brought him over $1 billion in personal gains. While Founders Fund did not participate in the initial round of investment, they subsequently invested $8 million, eventually generating $365 million in returns for their LPs (a 46.6x multiple).

Thiel later considered Facebook's Series B financing a major mistake. The first-round investment valued the company at $5 million, and eight months later Zuckerberg informed Thiel that the Series B valuation had reached $85 million. "The graffiti on the office walls was still terrible, the team was only eight or nine people, and every day felt the same," Thiel recalled. This cognitive bias caused him to miss the lead investor opportunity, only doubling down on his bet when the Series C valuation reached $525 million. This led him to learn a counterintuitive lesson: "When smart investors are driving up the valuation, it is often still underestimated—people always underestimate the rate of change."

Sean Parker included Michael Moritz on his "blacklist" for his own reasons. The son of a television ad broker and marine biologist, Parker shook the tech world at the age of 19 in 1999 with the P2P music-sharing app Napster. Although Napster was eventually shut down in 2002, it earned Parker both reputation and controversy. That same year, he founded the contact management app Plaxo, whose social features and "dangerous prodigy" aura attracted investors like Sequoia Capital's Moritz to inject $20 million.

Plaxo followed in Napster's footsteps: a promising start followed by a decline. Reports at the time indicated Parker's management style was erratic—disrupted sleep schedule, team unfocused, volatile emotions. By 2004, Moritz and angel investor Ram Sriram decided to oust Parker. As Parker attempted to cash out his shares, conflicts escalated: Plaxo investors hired private investigators to track his whereabouts, and examining communications uncovered drug-related signs (Parker argued they were for entertainment purposes and did not affect work). The debacle concluded in the summer of 2004 when Parker exited, inadvertently leading to a turning point—after leaving Plaxo, he immediately collaborated with Mark Zuckerberg. The two had met earlier in the year at the lightning-fast expansion of Facebook on the Stanford campus; Parker proactively wrote to the young founder to discuss future development.

Parker even flew to New York, dining with Zuckerberg at a trendy Tribeca restaurant, overdrawing his bank account. As Plaxo was crumbling, he reunited with Zuckerberg in Palo Alto, becoming Facebook's president and commencing a brief yet legendary partnership. His first move was to seek revenge on Michael Moritz and Sequoia Capital—when Facebook surpassed one million users in November 2004, Sequoia sought an opportunity to engage. Parker and Zuckerberg devised a cruel prank: they intentionally arrived late in pajamas and presented a slideshow titled "Top Ten Reasons Not to Invest in Wirehog," mocking Sequoia, which included slides saying "We have no revenue," "We are late in pajamas," "Sean Parker is involved," among others. "Given what we have done, we would never accept an investment from Sequoia," Parker stated. This missed opportunity may have been Sequoia's most painful miss in history.

As shown in this episode, the Napster founder played a key role in the early funding of Facebook, guiding Zuckerberg into the world of venture capital. Therefore, when Zuckerberg met Thiel and Hoffman at Clarion's Presidio office, Parker was also present.

Although Thiel and Parker had crossed paths during the Plaxo days, it was during the Facebook era that their partnership was truly solidified. In August 2005, while renting a party mansion in North Carolina, Parker was arrested in a cocaine search incident involving an underage assistant (although not prosecuted and denied involvement), ultimately leading to his departure from Facebook. This turned out to be a win-win turning point: Zuckerberg was ready to take over the reins of management, investors rid themselves of a brilliant but elusive spokesperson, and Parker himself admitted that his "hit and run" personality was not suited for day-to-day operations.

Months later, Parker joined Thiel's venture capital firm as a general partner - by then it had been renamed Founders Fund (eventually dropping the definite article like Facebook). This name better suited their ambitions and positioning. "We had some disagreements with some of the investors from the PayPal era, and we thought we could operate in a completely different way," Howery said. The core idea was simple yet disruptive: Never oust the founders.

While today the "founder-friendly" market seems commonplace, it was truly pioneering at the time. "They pioneered the 'founder-friendly' concept, at a time when the Silicon Valley norm was to find a technical founder, hire a professional manager, and eventually kick both out. The investors were the actual controllers," assessed Flexport CEO Ryan Peterson.

"This is how the venture capital industry operated for the first 50 years, until Founders Fund emerged," summarized Stripe co-founder John Collison of venture capital history. Since the 1970s, Kleiner Perkins and Sequoia made successful interventions in management, with the "investor-driven" model proving highly effective in cases like Atari and Tandem Computers. Even 30 years later, top-tier venture capitalists still held onto this inertia of thought—power belonged to the capital, not the entrepreneur. Sequoia's legendary founder Don Valentine even joked about locking mediocre founders in the "Manson Family dungeon."

Founders Fund's "Founder First" concept is not only a differentiation strategy, but also stems from Thiel's unique understanding of history, philosophy, and the essence of progress. He firmly believes in the genius value of the "sovereign individual," considering that constraining those who break norms is not only economically foolish, but also a detriment to civilization. "These people will ruin the creations of the world's most valuable inventors," Luke Nosek expressed the team's disdain for traditional venture capital.

Sean Parker perfectly embodies this concept, but his joining at the age of 27 still raised concerns among investors. Reports announcing his appointment bluntly stated, "His past experiences have made some LPs nervous." Parker himself also admitted, "I have always lacked security and constantly question after meetings whether I provided value."

This concern prompted an attack from old rival Mike Moritz. After raising $50 million in 2004, Founders Fund made another move in 2006, targeting $120-150 million. By this time, the team had undergone a transformation: Parker joined, Nosek came aboard full-time, and with Thiel as Facebook's first external investor casting a halo, this hedge fund's subsidiary was evolving into an emerging force.

This move clearly angered Moritz. According to Howery and others' recollections, the Sequoia helmsman tried to obstruct their fundraising: "When we were raising our second fund, a warning slide suddenly appeared at the Sequoia annual meeting—Keep away from Founders Fund." Brian Singerman, who joined two years later, added details: "They threatened LPs that if they invested in us, they would permanently lose access to Sequoia."

Meanwhile, reports from that period showed Moritz's language was more cryptic. At an LP meeting, he emphasized "appreciating founders who stick with their companies in the long term," and specifically named several well-known entrepreneurs who had failed to do so. This was a clear reference to Founders Fund partner Sean Parker. "We increasingly respect the founders who build great companies, rather than speculators who put personal gain above the team," Moritz wrote in a follow-up response.

This "boomerang effect" instead propelled Founders Fund forward: "Investors were curious as to why Sequoia was so fearful. This actually released positive signals," Howery stated. In 2006, the fund successfully raised $227 million, with Thiel's contribution dropping from 76% in the first round to 10%. Howery pointed out, "Stanford University's endowment fund led the investment, marking our first institutional investor recognition."

As early investments began to bear fruit, Founders Fund's unique investment philosophy started to demonstrate its power. Thiel's aversion to institutionalized management kept the fund in a state of "efficient chaos" during its first two years. Howery was busy with project discovery, and the team resisted fixed agendas and routine meetings.

Due to Thiel's need to balance Clarium Capital, his time was extremely limited. Howery stated, "I could only schedule him for key meetings." While Parker's joining did not change the fund's operating principles, it brought more systematization: Howery explained, "When Luke and Sean joined, the three of us could jointly evaluate projects, or one person could do the initial screening before involving the team in the decision-making."

The core team's complementary abilities emerged: "Peter is a strategic thinker, focusing on macro trends and valuation; Luke has both creativity and analytical skills; I focus on team assessment and financial modeling," analyzed Howery. Parker complemented the product dimension: "He has a deep understanding of internet product logic, and his experience at Facebook has made him adept at identifying consumer internet pain points and accurately pinpointing opportunities in niche areas." His personal charm also became a negotiation weapon: "He is highly charismatic, especially outstanding in the final stages of a deal."

In addition to the iconic investments in Facebook and Palantir, Founders Fund also made an early successful bet with Buddy Media, selling it for $689 million to Salesforce. However, they missed out on YouTube—an opportunity well within their "range" as the founders Chad Hurley, Steve Chen, and Joed Kareem all came from PayPal, but it was captured by Sequoia's Roelof Botha and sold to Google for $1.65 billion just a year later.

In any case, Founders Fund's performance in its first few years has been impressive, and even more glorious moments are yet to come.

In 2008, Thiel reconnected with his old rival Elon Musk at a friend's wedding. This former PayPal colleague had already founded Tesla and SpaceX with the cash-out from PayPal. While the venture capital market was chasing the next consumer internet hot trend, Thiel's interest was waning—stemming from his fascination with French philosopher René Girard's teachings during his Stanford days. "Girard's ideas were out of sync with the times, perfect for the rebellious undergraduate appetite," Thiel recalled.

Girard's theory of "mimetic desire": human desires stem from imitation rather than intrinsic value. This theory became the core framework for Thiel's interpretation of the world. After witnessing the collective frenzy in the venture capital world following Facebook's rise, Founders Fund, although investing in the local social network Gowalla (later acquired by Zuckerberg), appeared somewhat reluctant.

In his book "Zero to One," Thiel succinctly summarized: "All successful companies are different—by solving a unique problem to gain a monopoly position; all failed companies are the same, as they have failed to escape competition." Although the venture capital field is hardly monopolistic, Thiel still embodies this idea in his investment strategy: seeking out areas that other investors are unwilling or unable to touch.

Thiel shifted his focus to hard technology—companies that build in the atomic world rather than the bit world. This strategy comes with its costs: after Facebook, Founders Fund missed out on all major opportunities in the social field such as Twitter, Pinterest, WhatsApp, Instagram, and Snap. But as Howery puts it: "You are willing to trade all these misses for SpaceX."

After a reunion at a wedding in 2008, Thiel proposed to invest $5 million in SpaceX, partially motivated by "mending the cracks of the PayPal era" and showing his incomplete trust in Musk's technology. At that time, SpaceX had experienced three launch failures and was almost running out of funds. A former investor accidentally cc'd an email to Founders Fund, further exposing the industry's widespread pessimism about SpaceX.

While Parker chose to avoid the field due to unfamiliarity, other partners pushed forward wholeheartedly. As the project lead, Nosek insisted on increasing the investment to $20 million (which accounted for nearly 10% of the fund's second phase) to enter at a pre-money valuation of $315 million—this was the largest investment in Founders Fund's history and proved to be the wisest decision.

"This was highly controversial, and many LPs thought we were crazy," Howery admitted. But the team believed in Musk and the technological potential: "We have missed several PayPal colleague projects; this time we must fully bet on it." In the end, this investment doubled the fund's stake in its best project.

As a result, a notable LP that Founders Fund was in talks with cut ties. "We parted ways because of this," Howery revealed. This anonymous LP missed out on an astounding return—over the following 17 years, the fund accumulated investments totaling $671 million in SpaceX (the second-largest holding after Palantir). By the end of December 2024, when the company conducted an internal share buyback at a $350 billion valuation, the holding value had reached $18.2 billion, achieving a 27.1x return.

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