2025-07-10 20:32:26
“Some of the best analytical work out there - we learn something new from every post!” — Peter, a paying member
Friends,
What will it take for Europe to succeed as a technological force over the next century?
In discussing that question with Helsing co-founder Torsten Reil, he shared an observation. Whereas great American entrepreneurs tend to continue building even after they’ve achieved prominence, their European counterparts often prefer to retire early. By doing so, they deprive the continent of decades of productivity and hamper its long-term innovation.
Though it’s certainly not the only factor, it is an important one. To try and convince more great European entrepreneurs to keep building, Torsten and I have co-authored today’s piece. It explores this cultural difference, its causes, and its impact.
We hope you enjoy it.
This is an opinion piece written by The Generalist’s Mario Gabriele and Helsing co-founder Torsten Reil.
In 2002, eBay bought PayPal for $1.5 billion. By doing so, it made a handful of startup founders and senior operators wealthy. Elon Musk earned $250 million, Peter Thiel clipped $60 million, and Max Levchin’s windfall totalled $34 million. Reid Hoffman, Roelof Botha, David Sacks, Keith Rabois, and others would have earned decent paydays, too.
It is a testament to the ambition of this group that PayPal’s acquisition was not the end of their building careers, but the beginning. It hardly bears repeating, but in the following years, members of tech’s most productive “mafia” founded SpaceX, Tesla, Neuralink, Palantir, LinkedIn, YouTube, Affirm, Yelp, and OpenDoor, to name just the headline efforts. They brought cutting-edge technologies to life, fortified national security, created more than a hundred thousand jobs, and manifested over a trillion dollars in enterprise value.
Entertain, for a moment, a counterfactual: What if PayPal had been founded in Europe instead of California? Would its mafia have produced the same outcome? Would Europe be leading in rocket launches, electric vehicles, and defense technology? Or, influenced by milder environs, would its members have chosen simpler, less stressful alternatives – preferring to angel invest, dabble in side projects, and relax in the paradises of Tuscany or Cap d’Antibes.
For too long, the continent’s most productive founders have chosen the latter path. They have failed to use their experience, network, and ability to take progressively bigger swings. Peruse a list of significant European exits and look up what the founders are currently doing, should you need more proof. You will find plenty running diversified venture vehicles or spinning up marginal products, and precious few attempting to build something truly ambitious.
You need not consign yourself to Europe’s largest exits. It is perhaps even more concerning that founders who secure modest acquisitions seem content to quasi-retire. Scan the ecosystems in London, Berlin, Amsterdam, Paris, and beyond, and you’ll find founders who earned a few million from a subscale acquisition and live in balmy comfort. In many respects, this is a rational decision. Starting and scaling a business is painful and stressful. But by stepping away from entrepreneurship early, these founders deprive the world (and themselves) of what they might have built with the lessons learned from their first venture.
Naturally, there are exceptions. Spotify’s Daniel Ek has propelled his music streaming platform to a $148 billion valuation, breaking a 52-year stretch in which Europe had failed to produce a company worth more than $100 billion from scratch. At the same time, Ek has launched preventative healthcare company, Neko, and was the founding investor in AI defense company, Helsing. (Torsten Reil, Helsing Co-CEO, is co-author of this piece.)
Two of Skype’s co-founders also deserve credit: Janus Friis and Ahti Heinla have spent eight years scaling Starship Technologies, an autonomous robotics delivery company. Though yet to transform its industry, it is nevertheless an ambitious project with the potential to make a greater impact than the founders’ previous business.
America does not seem to have this problem. Why? Because within the confines of Silicon Valley, it is socially damaging to take an early retirement. The best builders retain the respect of their peers through relentless ambition and remaining in the arena. Step out of it for long enough, and your relevance wanes quickly. The result is a culture that champions urgency, ambition, and continued exertion.
Long after achieving “post-economic status,” America’s entrepreneurs continue to launch new businesses. Thanks to Facebook’s acquisition of Oculus, Palmer Luckey had a net worth of $700 million when he chose to co-found Anduril. Travis Kalanick could have retired after founding Uber, but chose to work on CloudKitchens. Jack Dorsey was well on his way to a mega-hit with Twitter when he launched Square. After co-founding both Twitch and Cruise, Kyle Vogt is building once again with The Bot Company. Nearly a decade after Microsoft acquired LinkedIn for $26.2 billion, Reid Hoffman is still founding new businesses, most recently launching an AI drug discovery platform, Manas.
Not so in Europe. The old world venerates its old guard, even when its members are still in their thirties and forties. Rather than pushing its most capable citizens to utilize their productive years effectively, the continent’s culture celebrates their complacency. Thanks to widespread expectations around work-life balance and norms that dampen rather than amplify ambition, many effective entrepreneurs receive much greater social capital once they’ve stopped building.
The impact of this discrepancy is profound. Compare two elite builders in America and Europe. Conservatively, both have a total of four productive decades available to them, spanning from the age of 20 to 60. In America, a builder is likely to maximize all four of them, even if the character of their work changes. They may not log the same hours in the latter stages, but they rely on their connections and expertise to generate value. In the process, they train a new generation of founders and create technologies that might accelerate later progress.
Meanwhile, the European builder might tap out in their late thirties, moving through the remaining two decades at 0.5x speed. What might they have built had they expected more of themselves? How might society have benefited? How many younger founders might have been galvanized by superior apprenticeships?
If Europe were thriving, perhaps this could be excused. However, the last six months have made it unignorably clear that the region badly lags the US and China and needs a new technological renaissance to remain relevant and protect its interests. Now that Europe cannot rely on America, it must build lighthouse businesses worthy of staffing the technological talent it produces, particularly in artificial intelligence, deep tech, and defence. Failing to do so could cause a mass brain drain and box Europe out from the most consequential technologies of the modern era.
Europe is equal to these challenges, but only if it can rely on its best builders. We should not celebrate entrepreneurs who retire early—we should encourage them to go for it again rather than shelving their ambitions. It is time for those with the skills and experience capable of galvanizing technological and commercial breakthroughs to step off the sidelines and get back into the game. Tuscany can wait.
2025-07-08 20:03:28
Friends,
Today’s podcast is a little different.
Rather than a new interview, we’re releasing an audio version of the “No Rivals” series about Founders Fund. This is The Generalist’s most popular work to date, and we want to make sure that those who prefer audio can enjoy it, too.
Part I is available to everyone for free, but to access our full reporting and research, you’ll need to become a premium member. For just $22/month, you’ll unlock the complete audio recording (all 3 hours and 15 minutes of it), as well as all of our other work. Once you subscribe, you’ll be able to listen to the full audio directly from your Substack app.
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→ No Rivals: The Prophet (Part I)
→ No Rivals: The Disciples (Part II)
→ No Rivals: The Gospel (Part III)
→ No Rivals: The Kingdom (Part IV)
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2025-07-02 00:03:41
“Mario provides in-depth, never-gets-old insights from leading technologists of our age and packages them in a creative, friendly format." — Alexander, a paying member
Friends,
The end is upon us.
In the final edition of “No Rivals,” we examine the full reach of Founders Fund’s power, spanning Silicon Valley, the Pentagon, and the White House. No other firm has played a larger role in tech’s rightward shift or the country’s growing techno-militarism. Those efforts have been driven by Founders Fund’s unusual (and strikingly successful) approach to incubation, a process that has yielded the $30.5 billion Anduril, space manufacturer Varda, and nuclear startup, General Matter.
We conclude with a distillation of Founders Fund’s “House Style” and an in-depth look at its performance. This includes a position-by-position analysis and represents the most detailed accounting of the firm’s returns ever reported.
If you haven’t started “No Rivals” yet, you can now read the entire series front to back:
Part IV: The Kingdom (below)
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Previously on No Rivals…
Silicon Valley’s philosophical trinity consists of three prophets: Marc Andreessen, Paul Graham, and Peter Thiel. Of the three, Thiel wields the greatest influence. His once-arcane positions on democracy’s failings and American militarization have become mainstream in tech.
Thiel’s intellectual power stems from an unusual mind, defined by reflexive contrarianism and a willingness to follow thoughts into forbidden territories.
With the assistance of Chief Marketing Officer Mike Solana, Thiel has used these qualities to manifest considerable soft power. Founders Fund’s cultural weapons include “Zero to One,” Silicon Valley’s philosophical manifesto, and the Thiel Fellowship. Recent initiatives like Hereticon conferences and Pirate Wires media have extended its sway.
Throughout the 2010s and into the 2020s, Founders Fund built true cultural influence. But could it use that power to build the future it preached?
There are other, louder indicators, but a telltale sign that a venture capital firm is out of ideas and running to fat is when it launches an incubation strategy. Frustrated with high prices or insufficiently interesting opportunities, managers follow a logical path: Instead of waiting for the next billion-dollar business to walk through our door, why don’t we just build one? How hard could it be?
That so few great companies have arisen from venture incubations answers the question. Outside of Snowflake, there’s a paucity of truly colossal companies that have grown out of this model within the past couple of decades. (Though programs like Y Combinator are occasionally referred to as “incubators,” they do not operate the same way, giving founders with existing early-stage businesses capital and guidance, rather than conceiving of an idea in-house and hiring management to build it.)
Founders Fund is an improbable exception. Its religious belief in the importance of outlier founders could have conflicted with the plug-and-play approach many incubations take; the next Mark Zuckerberg will not join a pre-made company as an outside CEO.
It has no dedicated program guiding its approach. And yet in Anduril, it functionally incubated one of the most consequential companies of the past decade. In Varda and General Matter, it appears to have two other highly promising businesses coming down the pike. (It also deserves partial credit for Palantir, given Thiel’s involvement as co-founder and first backer, but as we’ve noted, its origins predated the firm.) The introduction of this strategy owes much to the arrival of Trae Stephens.
There is something of the Paul Bunyan in Stephens’s story, renovated for the modern era. He was raised in rural Ohio, thirty miles northeast of Cincinnati, in a log cabin his father had built entirely with his own hands. His mother, a “salt-of-the-earth Midwesterner,” worked a series of jobs to help support the family, taking positions as an executive assistant, librarian, and math teacher during his youth. They lived paycheck to paycheck much of the time.
Though Stephens’s father had no college education, he’d built a career for himself as a roller-coaster engineer, a less unusual job than you might think in that part of the country. “You know there’s those T-shirts that say, ‘Virginia is for lovers,’” Stephens said, referring to the state’s popular slogan. “Well, the Ohio shirt is ‘Ohio is for coasters.’”
His father’s job brought enviable perks for the young Stephens. “We grew up going to amusement parks constantly,” he recalled. “We were the weird family that didn’t have to pay for anything. My dad would take me to work with him and I’d ride all the rides before the park opened.”
Beyond reveling in the screaming drops and loop-de-loops of Kings Island and Cedar Point, Stephens developed an early passion for reading. “From as early as I can remember, the last hour of our night every night was my whole family sitting in the living room reading in silence,” he said. “As a parent now, I ask myself, ‘How did my mom and dad pull that off?’” That developed into a love of writing, which Stephens leveraged to write puckish columns as editor of his high school paper. (Is that Peter Thiel’s leitmotif playing?)
“I got into a bunch of trouble trolling people,” Stephens said, recalling one particularly controversial edition of his “Politicks” column on how poorly mental health drugs performed compared with placebos. “I was stirring the pot probably too much for a 17-year-old in rural Ohio. People thought I was saying that mental health isn’t real. My principal had to talk to me about staying in the box after that.”
Stephens envisioned a future as an intrepid investigative journalist working for a leading international publication, and applied to the universities best-known for grooming such talent.
On September 11, 2001, his plans changed. “It happened on a dime,” he said. “I was sitting in my principal’s office watching the footage and I just blurted out, ‘I want to do something in service to the country. I don’t think I want to do journalism anymore.’” Instead of Columbia or Northwestern, Stephens now dreamt of going to Georgetown and building a career in the public sector.
There was only one problem — he was rejected. His pain was compounded when on the same day that he received the “skinny letter” from Georgetown, his high school girlfriend broke up with him. Rather than crush Stephens’s spirit, the double rejection seemed to ignite something in him. And so when his mother suggested he fly to Washington, D.C., and try to convince the university’s admissions officers to let him in, Stephens felt motivated enough to give it a shot.
That led to him sitting on the steps outside of the admissions office, clutching a stack of recommendation letters he’d collected from high school teachers. “I literally just sat there and said, ‘I’m not leaving until I speak to the Dean of Admissions.’” Stephens admits that it would make for a more dramatic story had he been left idling for hours, ideally overnight.
In reality, it took about thirty minutes for the dean to bring him in and ask, one imagines with the exhaustion of someone who has just told tens of thousands of dreaming students “no,” “What do you want?”
Stephens made his pitch, stacking his envelopes on the table between them. “I said, ‘I don’t know what else to do. I really want to go to school here. I have literally perfect standardized test scores, I’ve never gotten a B in my entire life, I’m valedictorian of my high school class and a three-sport varsity athlete. I don’t understand.”
Stephens recalled the dean’s sigh and the precise words he uttered next: “You have to understand, there are cracks in the meritocracy.”
Stephens left with his name at the top of Georgetown’s waitlist. He got in. That fall, he started school in the nation’s capital, going on to major in Middle Eastern Studies.
In the years that followed, he leveraged the school’s network to begin his career in the public sector and intelligence communities, working for Afghanistan’s D.C. embassy while at school. “I had a very close personal relationship with multiple members of the Karzai family,” Stephens said, referring to former president Hamid Karzai. “It was a crazy experience to have as basically a teenager. The most important international relationship of the early 2000s was with the transitional government of Afghanistan. To accompany the president of Afghanistan to meetings at the White House and read through briefing books with him was wild.”
After graduation, Stephens joined the staff of Ohio Senator Rob Portman, before moving into the intelligence community, where he sat “in the basement of a concrete building doing natural language processing” for two and a half years. His knowledge of Arabic and self-taught coding skills made him an asset to the agency in question’s computational linguistics efforts.
It was in that seat that Stephens saw an early demo of Palantir. Immediately, he recognized its value. “I went back to my team and said, ‘This would save me so much time, probably a day a week of work.’”
Despite his urging, Stephens was unable to get his higher-ups to consider adopting the software. Frustrated, he reached out to the Palantir executive who had given the demo, future CTO Shyam Sankar. “I said, ‘I hope you’re not wasting your time; this isn’t going anywhere. I’ve been trying to fight the battle internally.”
Sankar was unfazed. “Shyam just responded, ‘LOL’” Stephens said. The Palantir executive then followed it with a question: “I’m not trying to push my luck, but what are you up to?”
Not long after, Stephens found himself standing in Palantir’s Palo Alto workspace, dressed in a suit, tie, and cufflinks. Meanwhile, Sankar had just spent the night sleeping on a cardboard box in his office. “He still makes fun of me for it,” Stephens said. A whirlwind few hours followed, with Stephens meeting Palantir CEO Alex Karp and future Anduril co-founder Matt Grimm. When Stephens received a job offer at the end of the daylong gauntlet, he accepted on the spot.
Stephens spent nearly six years at Palantir, participating in its maturation from fledgling startup to a mature growth-stage business serving Western-allied governments around the world. It was during that spell that he was acquainted with the company’s first investor, Peter Thiel, though Karp delayed introducing the pair for as long as he could muster.
“About two years into my time at Palantir, I had this conversation with Dr. Karp, I forget what about,” Stephens said. “I asked him a question about Peter and he said, ‘Trae, I’m never going to let you meet Peter.’ I was like, ‘Oh. That’s weird. Why?’ And he said, ‘If you meet Peter, Peter will like you too much and he’ll try to poach you, and that will be that.’”
For two years, Karp managed to keep Stephens out of Thiel’s clutches, but in 2012 the pair met. A friendship quickly formed. “We just really hit it off, and every time he was on the East Coast, we’d get together and have breakfast,” Stephens recalled. Their shared Christian faith was a particular point of connection, as were their voracious reading habits. “Peter loves talking about deep theology stuff. He would assign books for me to read before the next time we got together. We really connected over that stuff,” Stephens said.
As Karp had prophesied, a job offer followed. In March 2013, Thiel told Stephens that his venture firm was closing in on its first billion-dollar fund and he wanted him to join. “He was my boss, the co-founder of the company I worked for, so it was not at all clear if it was an order or an offer,” Stephens said. Nevertheless, he agreed to meet with Founders Fund’s team, connecting with Lauren Gross, Brian Singerman, Mike Solana, and Geoff Lewis while they visited New York.
“It was a disaster,” Stephens said of that first meeting. “Lauren was like, ‘Why am I talking to you?’ And I said, ‘I don’t know, Peter told me to talk to you.’ Then she asked, ‘Why are you interested in venture capital?’ and I was like, ‘To be honest, I’m not really.’” It made for an awkward encounter.
Perhaps because of that, it took nine months for Stephens’s offer to arrive. With typical theatricality, Thiel officially sent it over on Thanksgiving Day, 2013. Stephens still knew next to nothing about venture capital, but he’d warmed up to the idea, especially after the birth of his first child. An investor’s schedule seemed vastly favorable to the unrelenting hours he’d been putting in at Palantir. He accepted, feeling it was “as good a time as any to transition.” Little did he know that within a matter of years, he’d look back on the hours Palantir required as the equivalent of a “lifestyle job.”
But first, there were three and a half years of learning the venture craft. At Brian Singerman’s advice, Stephens committed to take 500 pitches in his first year, ending his first twelve months with 504 under his belt. “It was a crazy pace,” he said. “There’s no reason to meet with that many companies unless you’re in your first year of venture capital. But eventually, you start to be able to make a decision in five minutes. You can sit in a meeting and say, ‘This is a definite no.’ And occasionally, very occasionally, you meet someone and you start feeling that flutter of ‘There’s something special.’” Stephens experienced that twice his first year, falling in love with Flexport and Qadium (renamed Expanse and now Cortex Xpanse), a security startup. The latter sold to Palo Alto Networks for $800 million in 2020.
While Stephens immersed himself in tech’s vast salmagundi of sectors, his mind inexorably returned to matters of national security: Why hadn’t anyone built a modern defense prime for the software era? If America was to remain a global superpower, Stephens knew its military needed continued innovation. He set his sights on finding a startup to back. He met with more than a hundred but came away from those conversations believing that none had the correct approach. And so, in 2017, he set out to build a company of his own — while retaining his role at Founders Fund.
The result was Anduril, co-founded by Stephens, Palmer Luckey, Brian Schimpf, Matt Grimm, and Joseph Chen. It is America’s most consequential and valuable defense startup since SpaceX, with a recent fundraise reportedly valuing the company at $30.5 billion.
As you might expect, Founders Fund was Anduril’s first backer and is its largest external shareholder. It has invested $1.4 billion in the company, the most the firm has ever invested in a single startup. The latest figures show that stake is currently valued at $5.3 billion.
Varda looks like the firm’s next homegrown success. Founded in 2021 by partner Delian Asparouhov and SpaceX engineer Will Bruey, Varda is another example of Founders Fund’s creativity and ambition.
Born in post-Soviet Bulgaria, Asparouhov’s family had emigrated to the United States in the mid-1990s. As a child, he’d shown a remarkable proclivity for mathematics, benefiting from the tutelage of his statistician father. He competed regionally in the U.S. and spent one of his summers training alongside Bulgaria’s mathematics and informatics national teams.
In early high school, though, Asparouhov’s interests began to change. He found himself increasingly absorbed by robotics and space. Friends would later remind him that as early as 9th or 10th grade, he’d spoken about the commercial promise of space manufacturing.
Beyond it being undeniably cool, you might wonder why anything should be manufactured extraterrestrially. Space’s unique properties afford unusual advantages. Materials mix and interact differently in zero gravity, for example, and extreme temperatures can prove useful for certain processes. Because of the costs involved in bringing materials to space, low-orbit manufacturing has been considered an intriguing prospect for high-value pharmaceutical products and semiconductors. As the final frontier opens up, manufacturing items intended for space in space — satellites, for example — is also expected to become economically advantageous.
Asparouhov could not have fully considered the nuances of this as a high schooler, but he was sold on the need and promise. “I really wanted humanity to have a multiplanetary future,” he said, “but especially one with anti-communist ideas because of my upbringing in Bulgaria. I didn’t really believe that state governments would be the way that happened. Ultimately, it needed to be a private industry, and obviously private industry is fundamentally motivated by profits. That’s why I was obsessed with the idea of: How does one make profits in space?”
Asparouhov maintained that interest through two years at MIT, early entrepreneurial forays, and a budding venture career. Space tech was never his primary focus but a steady obsession that took him to wonkish aerospace conferences and consumed his nights and weekends. In the process, he gained a greater appreciation for the challenges of building commercially viable space companies. “I started meeting with a lot of founders operating in the space and learned how difficult it was to pull off these types of businesses,” Asparouhov said. That began to erode his enthusiasm. “I got somewhat disinterested in the idea for a time, given how complex it was.”
An event at the end of 2019 reignited his excitement: SpaceX’s Falcon 9 rocket launched and landed four times in a row. It was a breakthrough, showing that reusable rockets were viable. Suddenly, the heavens looked exponentially more open. Asparouhov reached out to friends in the industry to validate his reading. How reusable were these rockets? Could the Falcon 9 take off and land 40 times in a row, rather than just the four it had demonstrated? “The resounding feedback I got was, ‘There’s no reason we can’t get to 40.’”
2025-06-26 23:46:13
“Deep thinking on what makes businesses and firms great.” — Proby S, a paying member
Friends,
Founders Fund is not just a venture capital firm. It is a narrative agent with a gospel to spread.
Through Zero to One, the Thiel Fellowship, and provocative soft power initiatives, Founders Fund exerts a unique influence in Silicon Valley. More than any other actor, it is responsible for venture capital’s contemporary deep tech fervor and nationalistic tenor.
In Part III of “No Rivals,” we discuss Founders Fund’s polarizing gospel and how it has impacted its investing practice.
If you haven’t read Parts I or II yet, you can find them both here:
By a growing margin, the No Rivals series has quickly become the most popular work The Generalist has ever published. Here is what others have said:
“IMHO, this isn’t just a profile. It’s a saga of power, risk, and reinvention at the highest levels of tech investing. A good start for a Netflix series.”
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“Please turn this into a book!”
“Fantastic weekend read on the origins and inner workings of the enigmas: Peter Thiel & Founders Fund”
We spent 18 months pulling together this 35,000-word series. That’s the approximate equivalent of a 150-175 page book. Unlock the full series and support this deep research by joining as a premium subscriber today. Not only will you access all of our Founders Fund research, you’ll uncover a library of case studies on other venture firms and leading tech companies, managerial playbooks, and a private database of breakout startups.
Previously on “No Rivals”…
As Clarium Capital collapsed between 2008 and 2011, Thiel reinvented himself in the private markets. To supercharge his venture efforts, he funneled the best performers of his Clarium team to Founders Fund, Palantir, and other organizations in his diaspora. This helped give rise to a litter of affiliated firms, or “Thiel Cubs.”
Most crucially, Thiel brought Lauren Gross over from Clarium to Founders Fund. As the head of IR and eventual COO, Gross transformed the firm’s operations, raising a $625 million Fund IV in 2011 and a $1.1 billion Fund V by 2014.
Simultaneously, Thiel assembled an unorthodox but brilliant investing team: Brian Singerman from Google, Scott Nolan from SpaceX, the enigmatic quantitative genius Napoleon Ta, and Geoff Lewis. This crew powered an extraordinary eight-year hot streak from 2008 to 2016.
The wins were staggering: Credit Karma (252.9x), Stripe ($3.9B stake), Spotify ($239M return), Stemcentrx ($1.1B return), and Nubank ($799M return). But the crown jewel was Airbnb—a $150 million bet that returned $3.75 billion, exemplifying Founders Fund's blend of macro vision, rigorous analysis, and concentration.
Founders Fund seemed to have the magic touch. But would it generate influence beyond its extraordinary financial returns?
Silicon Valley’s philosophical trinity is occupied by three major prophets: Peter, Paul, and Marc. Each preaches their own progress gospel, albeit with markedly different twists.
Allow us to work backward. First, there is Marc Andreessen, tech’s great ad man. No one in the industry matches the luster of his copywriting. Underestimate this ability at your peril. Andreessen has crafted the headlines for at least two super-cycles with “Software is eating the world,” “It’s time to build,” and “techno-optimism.” While not directly responsible, Andreessen’s colleague Katherine Boyle – who interned at Founders Fund at the beginning of her venture career – coined the phrase “American dynamism,” which has developed into the defining catchphrase for the style of nationalist, industrial investing currently in vogue. In finding the most incisive language for these concepts, Andreessen has positioned himself and his firm at the epicenter of each movement.
Next comes Paul Graham, the teacher. He too has a gift for distillation, responsible for memes like “founder mode” and “Do things that don’t scale,” but his narrative skill shows up most impressively when he acts as a guide, translating the complexity of company-building, career progression, or happiness into a legible apparatus. Pull this, twist that, look there, push this button.
Finally, there is Peter Thiel, the dark prophet. He speaks about progress, too, but from a place of grievance. The world could be wonderful, Thiel seems to say, if it weren’t so utterly shit. That his most famous utterance is “We wanted flying cars, instead we got 140 characters” is fitting. No dream can be expressed without disappointment. Our predecessors betrayed us, and we, the living, must muddle through the morass.
All three exercise remarkable influence over tech’s thinking, but Thiel may be most potent. Positions that once appeared arcane, barmy, or pointlessly bleak have started to look prescient (or, at least, have become more prevalent). It is now almost de rigueur within tech circles to gripe about democracy’s foibles, outline the need for new nation-state-like structures, extol the virtues of digital currencies, point to the ubiquity of mimetic desire, and champion the importance of American industrialization and militarization. Thiel was early to all.
Meanwhile, adherents of his thinking have ascended to prominent positions across the private and public sectors, including to the vice presidency. We should not expect these individuals to represent Thiel’s views precisely, but he has clearly influenced them.
It is a testament to Thiel’s primacy that even one of the other prophets has incorporated his talking points into his gospel. Andreessen’s “Techno-Optimist Manifesto” had more than a dash of Thielian flair, replete with “lies” and “enemies.” It is not as Thiel would have written it, but in its thrust, it shows considerable proximity to his worldview.
The same goes for “American dynamism.” Founders Fund did not coin the phrase, but they embodied it years before it became popular to do so. “They were so clearly American dynamism before a16z,” Parker Conrad said. The Rippling CEO is not an admirer of Andreessen’s firm after former partner Lars Dalgaard pushed him out at his previous company, Zenefits. “Founders Fund are the one with all the significant investments in that space.”
What are the origins of Thiel’s gospel? And how have he, and Founders Fund, translated it into such formidable soft power?
It begins, necessarily, with an unusual mind. It is self-evident that Thiel is running a very different set of algorithms than most people. There is raw horsepower, certainly, but this alone does not explain it. Many geniuses make dull conversationalists, particularly beyond their chosen bethel.
No such accusation can be leveled at Thiel, who has a flair for theatrics and seems to delight in provocation. As the keynote speaker at the 2022 Bitcoin Conference, for example, Thiel rabble-roused in front of a rapt audience, throwing $100 bills into the crowd, extolling bitcoin’s 100x potential and referring to Warren Buffett as “enemy number one” and “a sociopathic grandpa from Omaha.” Never mind that by this point, Founders Fund had liquidated the majority of its own crypto positions.
If Thiel were pure bombast, he would not be nearly so interesting. Beyond rhetorical flair, he has a rare willingness to follow a thought no matter where it leads. This is not true for most people. Most of us are given a safe frame in which we are free to think. We get this from our parents, our surroundings, our schooling, and our society. We are taught to engage with the edges of this frame, which we refer to as debate and which delivers the thrill of transgression, but we are actively discouraged from pushing beyond these boundaries and into the realm of taboo and heresy. Ideas from these territories are not only unsafe to discuss but threatening to think about. Most of us can notice this ourselves: try to think of something aberrant or forbidden and you can feel your mind recoil, knocking you back to safer terrain like the bumpers in a pinball machine.
In J.M. Coetzee’s masterly novel Disgrace, the protagonist David, a discredited university professor, considers his adult daughter’s romantic life. “He wonders how it is for Lucy with her lovers, how it is for her lovers with her. He has never been afraid to follow a thought down its winding track, and he is not afraid now. Has he fathered a woman of passion? What can she draw on, what not, in the realm of the senses? Are he and she capable of talking about that too? Lucy has not led a protected life. Why should they not be open with each other, why should they draw lines, in times when no one else does?” What would be a fraught, tortured moment for most characters is a frictionless slalom for David.
No one can pretend to truly understand another person’s inner landscape. But as much as can be guessed, Thiel gives the impression of a mind without these lines and a person willing to traverse its expanses unafraid.
This is perhaps the foundational reason Thiel thinks differently, but there are simpler explanations, too. Like Charlie Munger before him, Thiel follows the maxim of German mathematician Carl Gustav Jacob Jacobi, who said: “Invert, always invert.”
Thiel does this so reliably that it seems reflexive. Whatever the topic at hand, he instinctively flips it, just to see it from the other side. It’s in these moments that you see the hedge fund investor again, moving in the opposite direction of a market stampede. “He’s a true contrarian,” John Collison remarked. “He just takes the thing that everyone else believes to be true and inverts it. ‘What would it mean if it were not true?’ He chases that through to its conclusion, even if it takes you to some odd places along the way.”
From a purely pragmatic perspective, this can be a strategic way to build wealth. If you’re sharp enough to pick bets with big enough payoffs, it doesn’t matter if you err. The rare moments in which you’re right will more than make up for it.
From a rhetorical perspective, it’s arguably even more expedient. The narrative magnitude that comes from being contrarian and right tends to vastly outweigh a catalog of times you were contrarian and wrong. We remember Michael Burry for his “big short” in 2008, rather than the many other potential catastrophes he called incorrectly. As Thiel understands, if you consistently position yourself to the far-right of the bell curve, you make variance your friend.
With this blend of raw intelligence, mental freedom, and reflexive contrarianism, Thiel freewheels across the intellectual landscape. Why shouldn’t floating “seasteads” replace our moribund nation-states? Why wouldn’t bitcoin replace gold? Who says death is an inevitability when we’ve devoted so little capital to solving it? What if monopolies are good? Has anyone stopped to consider the benefits of letting a horse loose in a hospital? (Has your mind beaten a hasty retreat yet?)
The firm’s crypto investing is an illustration of how this manifests in investment decisions. Thiel saw the opportunity for true digital currencies extraordinarily early via his work at PayPal. That led Founders Fund to become one of the first venture capital firms to invest in crypto, buying bitcoin in 2014 at a price of $275 and Ethereum in 2016 at $77. (It passed on Coinbase; according to Brian Singerman: “We made the decision to invest early in bitcoin instead of Coinbase, when the answer would have been to do both.”)
It sold its positions in March 2022, avoiding the Terra and FTX blowups and subsequent market crash and generating $1.8 billion in profits. Capital flowed out of crypto, and prices plummeted. Once a new crypto winter had firmly taken hold, Founders Fund started considering buying in. By this time, the firm had recruited crypto specialist and former Pantera Chief Investment Officer Joey Krug. He, Thiel, and Napoleon Ta reasoned through going long on bitcoin.
Krug described how the trio weighed the social factors at play. “We asked ourselves, ‘What do the other players in the market have the ability to do or not do? Are they able to buy right now? Will their fund let them?’” Naturally, the trio considered the potential return profile up for grabs too. “If you think about Founders Fund’s investing on the growth side, which is what I consider Bitcoin and Ethereum to be, the main question marks are: Can you get to a solid 3 to 4x return without there being a huge amount of downside? You can always get a 3 to 4x return in crypto, but you have to buy when the downside is bounded.”
Starting in late summer 2023, Founders Fund “pulled the trigger,” investing $200 million in crypto, with its initial bitcoin buys coming in at $30,000. Within a year, bitcoin had more than doubled, before pushing to an all-time high of nearly $112,000. It is now bouncing around above $100,000. Though Founders Fund has not divulged whether it’s sold its positions yet, documentation shows it has invested a total of $294 million in bitcoin, which it holds at a value $1.58 billion. The $202 million it’s invested in Ethereum has done markedly less well, held at $213 million.
Thiel’s high openness not only draws him toward off-piste ideas, it attracts unusual, contrarian founders. “Peter is associated with all sorts of weird stuff,” Collison said, reeling off Thiel’s interest in seasteading, connection with the Enhanced Games — an Olympic Games–style contest in which steroids are encouraged — and association with gerontologists like Aubrey de Gray “and his long, shaggy beard.” By positioning himself as the “canonical weird rich dude,” he becomes “the lamp that the weirdo founder moths are drawn to.” “If you’re a founder who thinks, ‘Oh, I’m working on this thing and it’s slightly weird, who will understand this?’ You seek out Peter and Founders Fund.”
2025-06-24 20:03:11
A quick note before today's podcast: Last Thursday, we launched Part 2 of our four-part series on Founders Fund. If you haven’t read it yet, you can catch up on Part 1 here and Part 2 here. For everyone following along, Part 3 drops this Thursday, June 26th.
In the meantime, we hope you enjoy today's podcast episode below.
This episode is brought to you by Brex: The banking solution for startups.
How close are we to the end of humanity? Toby Ord, Senior Researcher at Oxford University’s AI Governance Initiative and author of The Precipice, argues that the odds of a civilization-ending catastrophe this century are roughly one in six. In this wide-ranging conversation, we unpack the risks that could end humanity’s story and explore why protecting future generations may be our greatest moral duty.
We explore:
Why existential risk matters and what we owe the 10,000-plus generations who came before us
Why Toby believes we face a one-in-six chance of civilizational collapse this century
The four key types of AI risk: alignment failures, gradual disempowerment, AI-fueled coups, and AI-enabled weapons of mass destruction
Why racing dynamics between companies and nations amplify those risks, and how an AI treaty might help
How short-term incentives in democracies blind us to century-scale dangers, along with policy ideas to fix it
The lessons COVID should have taught us (but didn’t)
The hidden ways the nuclear threat has intensified as treaties lapse and geopolitical tensions rise
Concrete steps each of us can take today to steer humanity away from the brink
(00:00) Intro
(02:20) An explanation of existential risk, and the study of it
(06:20) How Toby’s interest in global poverty sparked his founding of Giving What We Can
(11:18) Why Toby chose to study under Derek Parfit at Oxford
(14:40) Population ethics, and how Parfit’s philosophy looked ahead to future generations
(19:05) An introduction to existential risk
(22:40) Why we should care about the continued existence of humans
(28:53) How fatherhood sparked Toby’s gratitude to his parents and previous generations
(31:57) An explanation of how LLMs and agents work
(40:10) The four types of AI risks
(46:58) How humans justify bad choices: lessons from the Manhattan Project
(51:29) A breakdown of the “unilateralist’s curse” and a case for an AI treaty
(1:02:15) Covid’s impact on our understanding of pandemic risk
(1:08:51) The shortcomings of our democracies and ways to combat our short-term focus
(1:14:50) Final meditations
Website: https://www.tobyord.com/
LinkedIn: https://www.linkedin.com/in/tobyord
X: https://x.com/tobyordoxford?lang=en
Giving What We Can: https://www.givingwhatwecan.org/
The Precipice: Existential Risk and the Future of Humanity: https://www.amazon.com/dp/0316484911
Reasons and Persons: https://www.amazon.com/Reasons-Persons-Derek-Parfit/dp/019824908X
Practical Ethics: https://www.amazon.com/Practical-Ethics-Peter-Singer/dp/052143971X
Derek Parfit: https://en.wikipedia.org/wiki/Derek_Parfit
Carl Sagan: https://en.wikipedia.org/wiki/Carl_Sagan
Stuart Russell: https://en.wikipedia.org/wiki/Stuart_J._Russell
DeepMind: https://deepmind.google/
OpenAI: https://openai.com/
Manhattan Project: https://en.wikipedia.org/wiki/Manhattan_Project
The Unilateralist’s Curse and the Case for a Principle of Conformity: https://nickbostrom.com/papers/unilateralist.pdf
The Nuclear Non-Proliferation Treaty (NPT), 1968: https://history.state.gov/milestones/1961-1968/npt
The Blitz: https://en.wikipedia.org/wiki/The_Blitz
Operation Warp Speed: https://en.wikipedia.org/wiki/Operation_Warp_Speed
I’d love it if you’d subscribe and share the show. Your support makes all the difference as we try to bring more curious minds into the conversation.
Production and marketing by penname.co. For inquiries about sponsoring the podcast, email [email protected].
2025-06-19 23:42:06
"The best long-form essays on VC & Private Companies. " — MS, a paying member
Friends,
A prophet without disciples is a madman.
Founders Fund would not have achieved a fraction of its success had Peter Thiel not succeeded in winning others to his cause.
None have been more important than two largely unheralded figures: Napoleon Ta and Lauren Gross. Ta is the investor behind Founders Fund’s best-performing growth investments. A former poker player, Ta prefers to keep such a low profile that he has repeatedly asked his team not to submit his returns to Forbes’ Midas List.
Meanwhile, Gross is Founders Fund’s most important operator. As COO and head of IR, Gross scaled the firm’s AUM into the billions of dollars, staffed its world-class team, and executed Thiel’s vision.
In Part 2 of “No Rivals,” our series on Founders Fund, we chronicle Thiel’s major disciples and their impact on the firm. In the process, we tell the stories of its investments in Spotify, Airbnb, DeepMind, Stemcentrx, Stripe, and several others.
Part 1 quickly became The Generalist’s most popular piece ever. If you missed it, you can catch up by reading it here:
Given the depth and exclusivity of our reporting, the full series is available only to subscribers of our premium newsletter, Generalist+. For $22 per month or $220 per year, you’ll get unprecedented access to Founders Fund’s performance data, detailed case studies of their biggest wins and losses, and insights into how they’ve shaped Silicon Valley and Washington. If you work in tech, venture capital, or traditional investing, this series alone should more than justify a year’s subscription.
Previously on No Rivals…
Peter Thiel, Ken Howery, and Luke Nosek launched Founders Fund in 2005 with a radical promise: to never remove entrepreneurs from their own companies. This was a direct challenge to the traditional activist VC model in general, and to Sequoia’s Mike Moritz, in particular.
The firm's early performance was extraordinary. Thiel's $500,000 Facebook investment delivered $1 billion in personal returns and a windfall for Founders Fund. Palantir generated an 18.5x multiple and $3.1 billion in distributions.
Guided by philosopher René Girard's theories on mimetic desire, Thiel deliberately avoided the social media gold rush after Facebook. Instead, Founders Fund pivoted to hard tech, a call that led them to their greatest ever investment: SpaceX. Today, that position is valued at $18.2 billion.
By 2008, Founders Fund had built a promising early reputation, but was still a bit-part player in Silicon Valley. To turn the firm into a force, Thiel needed to scale capital and build a team…
Ever since PayPal’s acquisition, Peter Thiel had established his reputation as a hedge fund manager with an array of intriguing side projects: Frisson, a swanky San Francisco eatery; American Thunder, a short-lived magazine devoted to NASCAR racing; and, of course, his venture fund. Founders Fund was undoubtedly the most important of these less important things, but there was no question that Clarium Capital represented the barycenter around which the others orbited.
That began to change in 2008. The year started brightly, with Clarium coming off the back of a barnstorming 2007, up 40%, and sitting on over $7 billion in assets under management. Considering Thiel had founded the firm just six years earlier with $10 million, that rise was a testament to Clarium’s strong performance and Thiel’s growing reputation as a macro interpreter.
For several years, he had identified three thematic waves he intended to ride:
Rising 30-year U.S. Treasuries
The dollar outperforming the euro
Surging oil prices
During the first half of 2008, the world looked to be tilting even further in Thiel’s direction. While his peers in the hedge fund industry endured the “worst year on record,” Thiel racked up 59% in gains, driven by soaring oil prices.
They didn’t last. U.S. stocks crumbled to near-historic lows, and oil prices fell with them, erasing Clarium’s gains to leave it down 4.5% on the year. It never regained its footing, falling 25% in 2009 and a further 23% in 2010.
Investors fled, shrinking assets under management to approximately $500 million by 2011, down over 90% from its high. By then, most of it was Thiel’s own capital. The few LPs who stayed experienced a cumulative 65% drop between 2008 and 2011. By the end of that run, Clarium was effectively defunct. It would later get rolled into Thiel Capital, becoming a de facto family office.
Clarium’s demise was made more bitter by the fact that Thiel’s macro reading was largely sound. What scuppered it was not that Thiel had misconstrued the world’s shifting forces but that he, and the team, had been unable to translate those views into suitable trades. When the market turned in Clarium’s favor, it didn’t benefit as much as it should have; when the market turned against it, weak risk controls saw it incur mortal losses. In the end, Clarium posted annualized returns of 12% over the entirety of its history, but that didn’t help much when its worst years coincided with its fullest coffers.
If there was a silver lining to Clarium’s collapse, it came on the talent side. Suddenly, a swath of anomalous Thiel-ites were free to take on new missions, bringing their leader’s eccentric view of the world into new organizations and domains. Many did so with Thiel’s backing, or at his direct behest.
Some stayed to manage Clarium’s remnants as it morphed into Thiel’s family office. Others were pushed to Founders Fund or Palantir, or left to launch funds of their own.
Unlike Julian Robertson’s “Tiger Cubs,” Thiel often co-founded these organizations — making him more partner than backer to his set of “Thiel Cubs.” Of these, Valar and Mithril hold the starring roles.
In 2010, Clarium alums James Fitzgerald and Andrew McCormack founded Valar Ventures with Thiel. It began with a simple, complementary premise: while Founders Fund focused on backing Silicon Valley’s elite entrepreneurs, Valar would search for outliers beyond California.
New Zealand was a particular focus in Valar’s early days. In 2011, Thiel became a Kiwi citizen, calling New Zealand a utopia and suggesting it could become a promising geography for tech innovation. Perhaps as a reflection of that belief, and to continue currying favor, Valar invested in companies from the country, initially through a series of special-purpose vehicles totaling $100 million.
Its first Kiwi investment was its best: Valar accumulated shares in accounting business Xero at just shy of $1.50 a share in 2010. By 2017, the $4 million invested was worth approximately $54 million.
As Thiel’s interest in New Zealand waned, and with opportunities abounding elsewhere, Valar’s focus shifted as the years passed. It progressively widened its aperture to include Europe and emerging markets. In 2013, it led a $6 million Series A in TransferWise (now Wise), which hit an $11 billion valuation at the time of its direct listing. Valar would also snag positions in neobanks Nubank and N26.
In recent years, it has evolved once again. Because of Thiel’s PayPal credentials, Valar has always shown particular aptitude in fintech. Today it leans on this aspect of its identity, rather than narrowing in on particular geographies. It raised a $300 million vehicle in 2024.
Mithril Capital arrived just two years after Valar. In 2012, Thiel and former Clarium managing director Ajay Royan launched a $402 million growth equity shop. They added another Clarium M.D., Jim O’Neill, to round out the initial team. By then, O’Neill had already done an extensive tour through several Thiel entities, moving from Clarium to the Thiel Foundation before launching the Thiel Fellowship, a program that gave $100,000 to talented college dropouts (more on that later).
Like Valar, Mithril’s initial positioning was complementary to Founders Fund. While Founders Fund focused on high-risk early-stage investments, Mithril was designed to back more mature businesses, such as surgical robot Auris and fundraising platform Classy. Auris looks like Mithril’s best investment thanks to a multi-billion-dollar acquisition from Johnson & Johnson.
Despite such results, Mithril’s history has not been a happy one. Though Royan announced his desire to build the “capstone” of Thiel’s empire, serious allegations about his management began to circle in 2019. That year, former counsel Crystal McKellar alleged that Royan had misled investors, artificially pumping its numbers to reap financial rewards. McKellar also alleged that she had been unjustly fired for reporting these issues. Jim O’Neill repeated similar claims in a lawsuit filed a few years later, alleging wrongful termination and “toxic” management from Royan. Ultimately, the FBI led a probe into Mithril, and prominent LPs like Cambridge Associates reportedly conducted internal investigations of their own.
No public charges have been brought against Mithril or Royan, but the firm nevertheless appears to be managing out its final days. It last raised a fund in 2017 and, as of 2023, was reported to have just $100 million left to deploy.
Despite its ostensible issues, Mithril did succeed in attracting strong talent, including future Anduril co-founder Matt Grimm and future Vice President JD Vance. Like so many before him, Vance had been bewitched by Thiel after attending his speech at Yale Law School:
I attended a talk at our law school with Peter Thiel…
He spoke first in personal terms: arguing that we were increasingly tracked into cutthroat professional competitions. We would compete for appellate clerkships, and then Supreme Court clerkships. We would compete for jobs at elite law firms, and then for partnerships at those same places. At each juncture, he said, our jobs would offer longer work hours, social alienation from our peers, and work whose prestige would fail to make up for its meaninglessness. He also argued that his own world of Silicon Valley spent too little time on the technological breakthroughs that made life better — those in biology, energy, and transportation — and too much on things like software and mobile phones. Everyone could now tweet at each other, or post photos on Facebook, but it took longer to travel to Europe, we had no cure for cognitive decline and dementia, and our energy use increasingly dirtied the planet. He saw these two trends — elite professionals trapped in hyper-competitive jobs, and the technological stagnation of society — as connected. If technological innovation were actually driving real prosperity, our elites wouldn’t feel increasingly competitive with one another over a dwindling number of prestigious outcomes.
The Hillbilly Elegy author would describe the encounter as the “most significant moment” of his time in New Haven. After leaving Mithril, Vance would join Steve Case’s Revolution, before founding a firm of his own, Narya.
Looking at the full span of Thiel’s financial diaspora, it’s hard not to ask oneself what the point of it all is. Why bother to co-found multiple investment firms rather than unite several strategies under a single roof? Why shift employees from one organization to another?
Two reasons stand out.
First, more than almost anyone else, Thiel understands the importance of conserving talent. Once he decides someone meets his high bar, once he decides you are special, he is uncommonly proactive in ensuring that person remains in his orbit. Like a sports agent, he seems to understand what each “client” needs to further their career and deliver fulfillment, and then searches for it within his direct network. If an investor wants to experience operational life, they should join Palantir or Anduril; if an operator wants to learn how investors think, they can take a stint at Clarium or Mithril or Founders Fund; if someone is ready to start a firm of their own, why not do it with his backing?
By doing so, Thiel effectively captures part of the upside of a talented person’s entire career (or at least much more of it), reaping the benefits as they evolve from superstar operator to deft investor to founder to fund manager. Not everyone gets this support, nor do those chosen keep it if they fail to perform, but Thiel is unusually creative in hanging on to talent.
Another motivating factor may be Thiel’s sheer curiosity. He is incapable of doing one thing at a time, of staging his ambition. Always, he has at least two serious ventures running: at Thiel International, he moonlit as a founder; at PayPal, he moonlit as an investor; after PayPal, he founded a business, ran a hedge fund, and spun up a venture firm, all at the same time. By running multiple experiments simultaneously, Thiel forces each organization to jockey for his attention and capital, to prove one is more important than the other. It is, in a sense, a kind of hedging: Macro investing might seem like the best use of my time and talents today, but perhaps seed-stage venture will be tomorrow. By keeping talent in the system, Thiel gives himself the ability to run these experiments more effectively.
By the early 2010s, Founders Fund was about to become Thiel’s primary focus, powered by a Clarium refugee.
At the 2005 annual summit for Wesco Financial, the late Charlie Munger shared his views on investment banking and money management.
“It’s my guess that something like 5% of GDP goes to money management and its attendant friction,” Munger said. “Worst of all, the people doing this are among the best and the brightest. Hundreds and thousands of engineers, etc. are going into hedge funds and investment banking. That is not an intelligent allocation of the brainpower of the civilization.”
Had Lauren Gross been in the audience, she would have agreed. That same year, the Stanford economics graduate had taken an analyst position in Citi’s investment banking practice and found it stultifying. “I defaulted into it based on a general enjoyment of math but I wasn’t particularly blown away by it,” Gross recalled.
Still, Gross struggled to imagine what she would do instead. As far as she understood at the time, the only viable options for someone like her were to choose between banking, consulting, and perhaps a job at Google. The last of those options held little intrigue for Gross, despite her time in Palo Alto. “Unlike all of my partners that were building rockets out of their garages growing up, I was never particularly passionate about technology. I’m still not,” she said. Instead, Gross was motivated by people. “I’ve always been attracted to people that are uniquely bright. My favorite subject was always the teacher.”
Halfway through the two-year analyst program, Gross met the kind of uniquely brilliant person she’d hoped to find at Citi.
The introduction came via her friend and old college roommate, Dan Fink. “He was doing a hodgepodge of different projects for Peter,” Gross recalled. “He was connected to him because Peter stayed very connected to Stanford.” As part of Thiel’s orbit, Fink was invited to a cocktail party hosted on his rooftop overlooking San Francisco’s Palace of Fine Arts.
Gross knew a little about Thiel through Fink, but not much. “I knew he was a somewhat rich, somewhat important person, but I had no appreciation for his story,” she said. That was for the best. No sooner had she been introduced and asked a few preliminary questions than Gross launched into a tirade about investment banking. “I went on this long rant of how silly and mundane it was. It was drawing reasonably strong talent, but it was all about competing with the herd; modeling companies without understanding why.” Had Gross known the impressive particulars of Thiel’s resume, she might have had the urge to soften her frustration. “I’m not sure I would have had the boldness.”
Without knowing it, her tirade was tailor-made for Thiel. There was little that aggravated him more than talent sacrificed on the altar of careerism. “Why don’t you come in for an interview?” Thiel suggested.
A week later, Gross showed up at 1 Letterman Drive, Clarium’s office. Thiel got right to the point, offering her a job in investor relations (IR). “I remember saying, ‘Why do you think I would be good at that? ‘Why would I be good at IR and fundraising when I’ve literally never done and never expressed any interest in it?’” Gross said.
Thiel didn’t need a schmoozer, he explained. He needed someone sharp, sophisticated, and economically educated enough to tell Clarium’s macro story, in detail, so that he didn’t have to. He would later put the significance of the role in even starker terms: “He said to me, ‘Your bar for success is if I never have to take a fundraising meeting.’ The autonomy and depth with which he saw the role was different than I’d anticipated.”
Though Gross had majored in economics and seen the inside of Citigroup, she knew very little about Clarium’s world. That didn’t seem to faze the man sitting across from her. As he’d demonstrated at PayPal, Thiel hired for talent, not experience. “I learned really quickly that Peter just takes bets on young people, well ahead of their talent being proven,” Gross said. “I mean, when I started I wouldn’t have been able to define what a hedge fund was. Genuinely. But he just throws people into the deep end and lets them sink or swim.”
Despite Thiel’s assurances, Gross wasn’t ready to commit on the spot. “The amusing part of the story is my naivete. I said, ‘Great, well, I’d love to work for you, but I’m in this two-year investment banking program. I’m someone who’s firm in my commitments, so I have a year left.’
Thiel responded flatly, “If you like the job, you’ll start on Monday.”
Gross did. It was the beginning of a critical partnership between the pair, spanning two organizations and nearly 20 years. Though many other members of Thiel’s circle attract greater attention, few have been as essential to his continued success as the person who would become Founders Fund’s Chief Operating Officer.
But Clarium came first — a four-year whirlwind exposing Gross to the madness of the markets. Clarium’s seesawing fortunes fomented a pressurized environment and forced rapid learning. “I’m so deeply grateful that I was there through a financial crisis,” Gross said. “That’s an odd thing to say and perhaps not what Peter would want me to say, but it was a crash course in the job. You get asked infinitely more questions when things go wrong. You’re really pushed on the details: Why that trade? Why that size? Why that timing? Even if people don’t like the answers, you have to be able to nail them. I got substantially better at that during the back half of 2008.”
As Clarium teetered, Thiel surveyed the capital landscape with his quintessential sangfroid. If hedge funds were no longer the optimal way to capitalize on his skill set, what should he turn his attentions to instead? In 2010, he shared his view of the coming decade with Gross. “At so many points in my career, Peter has called these macro moments for me,” Gross recounted. “He approached me and said, ‘The next decade is going to be about venture capital. Companies are going to be staying private longer, and more of that value is going to be captured on the private side.’ It wasn’t him necessarily saying, ‘Hedge funds are over,’ but it sort of was.”
Thiel told Gross about the venture fund he’d been running on the side. Founders Fund was off to a good start, he explained, but it had minimal brand presence and needed to be bigger to capture the opportunity he expected to materialize. How much bigger? Within the next few years, Thiel wanted to raise a billion-dollar fund, he told her. “It was outlandish,” Gross said, “No one had a billion-dollar fund at the time.” There had been growth equity vintages that exceeded that benchmark, of course, but mega-vehicles had yet to come to traditional venture. Thiel wanted Gross to become Founders Fund’s lead fundraiser.
“I wanted to keep working for Peter, and I trusted his macro calls implicitly,” Gross recalled. “He placed someone I worked side by side with [at Clarium] at Palantir; I honestly would have gone there if he’d told me to.”
Gross accepted the offer, though she did so once more with characteristic circumspection, explaining that she’d love to meet the Founders Fund team and make a gradual transition. Once more, Thiel cut to the chase: “I’d like you to start on Monday.”