A serial entrepreneur with a lot of passion and determination, Peter Thiel is just another American success story. He, along with his family, immigrated to the United States during his early childhood. Thanks to a willingness to work hard, Thiel managed to become one of the most respected people in the technology industry. With an estimated net worth of $2.7 billion, Thiel is ranked 79 on Forbes Magazine’s list of the richest people in tech. Below we will take a look at the steps he took to amass his incredible fortune.
Early Life and Education
Born in October 1967, Thiel was born in Frankfurt, Germany and has virtually always had a very curious and creative mind. In a 2014 interview with ABC News, Theil mentioned that his favorite toy as a child was Legos and that his favorite childhood memory was receiving a globe of the world for his third birthday.
Although Thiel was born in Germany, he did not live in Europe for a long period of time as his family migrated to the United States a little more than a year after his birth. They initially move to Cleveland, Ohio. Thiel’s father Klaus Thiel worked as a chemical engineer for various mining companies and as a result the family had to frequently move to different countries. At one point, they had lived in South Africa and Namibia, a country located on the coast of the southwest of Africa. In George Packer’s book “The Unwinding: An Inner History of the New America”, he explained that Thiel’s strong advocacy for libertarianism was developed partly because he disliked the time when he was enrolled in strict schools in Africa. The family ultimately settled in Foster City, California in 1977. It so happened that Thiel, the soon to be tech mogul, was raised in a town that was very close to what is now known as Silicon Valley.
A very good math and science student, Thiel managed to get accepted into one of the world’s most renowned universities, Stanford University. There he began to develop a love for libertarianism. While at Stanford, Thiel and his friend Norman Book founded The Stanford Review, a conservative-libertarian student run newspaper that still operates to this day. It was initially funded with money from Irving Kristol, who was popularly known as the godfather of conservatism.
He graduated from the school in in 1989 with bachelor’s degree in Philosophy and eventually received his J.D. from Stanford Law School in 1992.
Finding Fulfillment in Being A Serial Entrepreneur
Thiel began his career off with a one year gig as a legal clerk for the U.S. Court of Appeals for the 11th Circuit. After, he moved to New York City to work as a securities lawyer for the law firm Sullivan and Cromwell. His position at the company did not last more than a year. In an interview with Fortune Magazine in 2014, Thiel described his time with Sullivan and Cromwell as the ‘‘most unhappiest period’’ of his entire life. He ultimately abandoned the job and switched into a career in investment banking. Between 1993 to 1996, Thiel worked as a derivatives trader for Credit Suisse.
Still feeling unfulfilled with the path that he was taking in life, Thiel returned to the California Bay Area in 1996. There he raised $1 million from friends and family to start a venture capital fund. It started off on a rocky start however things took a positive turn in December 1998 when Thiel partnered with three people — Max Levchin, Luke Nosek and Ken Howery — to start a money transfer company that eventually became Paypal. In March 2000, the company had merged with its main competitor X.com, a business founded by Elon Musk with a similar business model.
Paypal had its initial public offering in 2002. At the time the company was worth $800 million. Just after four months of going public, eBay announced that it would be acquiring Paypal for $1.5 billion. According to some reports, Thiel’s share of the acquisition was worth $55 million.
Investing His Way to the Billionaire Club
Following the acquisition of Paypal, Thiel founded a hedge fund management company called Clarium Capital. The fund’s assets under management peaked at $8 billion just before the 2008 recession and has since significantly decreased through to large redemptions from investors. As of 2010, Clarium managed a little under $700 billion. Many investors fled Thiel’s fund because of its poor performance over multiple years.
He has also played a role in the founding of two tech venture capital firms Founders Fund and Mithril Capital Management as well as a cyber-security company called Palantir Technologies who primarily provide its services to various U.S. intelligence agencies.
The vast majority of Thiel’s billion dollar fortune has come as a result of his early investment in the social networking giant Facebook. He loaned the company $500,000 in 2004 to help it grow. His loan was eventually converted into a 10.2 percent equity stake in the company. Thiel has since sold most of his Facebook shares. As of May 2016, his ownership in Facebook was valued just over $25 million.
The Bottom Line
Peter Thiel is one of the most powerful and influential people in Silicon Valley today. A judicial clerk turned technology entrepreneur, Thiel along with three other people built the online money transfer giant PayPal. They ultimately sold the company to eBay for $1.5 billion. Following the sale, Thiel started a venture capital fund to help back tech startups who he thought had a lot of potential. One of his most successful investments was a $500,000 capital injection into Facebook when it was slowly growing. He was actually the company’s first outside investor, and remains on the company’s board to this day.