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Founders Fund
San Francisco-based venture capital firm From Wikipedia, the free encyclopedia
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Founders Fund is an American venture capital fund formed in 2005 and based in San Francisco. The fund has roughly $17 billion in total assets under management as of 2025.[1][2] Founders Fund was the first institutional investor in Space Exploration Technologies (SpaceX) and Palantir Technologies, and an early investor in Facebook.[3][4][5] The firm's partners have been founders, early employees and investors at companies including PayPal, Palantir Technologies, Anduril Industries and SpaceX.[6]
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The firm's investments include Airbnb, Anduril, DeepMind, Rippling, Facebook, Ramp, Palantir Technologies, Pudgy Penguins, SpaceX, Spotify, Stripe, Neuralink, and Nubank.[7][8]
Notable partners include Peter Thiel[9] and since 2014 Trae Stephens.[10] Former partners include Brian Singerman,[9][11] Keith Rabois,[12] Cyan Banister, Ken Howery,[9] Kevin Hartz,[13] Sean Parker,[14] and Bruce Gibney.[15][16]
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Funding history
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The firm was organized by Peter Thiel, Ken Howery, and Luke Nosek in early 2005 and raised its first fund of $50 million from individual entrepreneurs and angel investors in January of that year.[17] Sean Parker, co-founder of Napster and ex-president of Facebook, joined in 2006.[17] In 2007, the firm raised a new fund of $220 million.[18]
In 2010, the firm raised its third fund, with $250 million in committed capital,[19] and in 2011, a fourth fund with $625 million of committed capital was raised.[20][21]
In 2014, Founders Fund raised a $1 billion fifth suite of funds, bringing the firm's aggregate capital under management to more than $2 billion.[22]
In 2016, Founders Fund raised a sixth, $1.3 billion fund, bringing the firm's aggregate capital under management to more than $3 billion.[23]
In 2020, Founders Fund raised a seventh flagship fund and its first growth fund, representing $3 billion in new capital and bringing the firm's aggregate capital under management to more than $6 billion.[24]
In 2022, Founders Fund raised an eighth flagship fund and its second growth fund, representing over $5 billion in new capital and bringing the firm's aggregate capital under management to more than $11 billion.[12]
In March 2023, Founders Fund cut the size of its eighth venture capital fund in half, from around $1.8 billion to around $900 million, to adapt to uncertain market conditions.[25][better source needed]
In 2025, Founders Fund raised its third growth fund, Founders Fund Growth III, at $4.6 billion for late-stage investments.[26]
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Philosophy and development
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The Founders Fund was conceptualized as an early-stage venture capital fund. From the start, it adopts Thiel's contrarian attitude, and bet early and aggressively on companies with the founders it deemed deserving of trust. Early in its history, it made many investments in internet or social media and health and life science research, among which there were investments in Spotify, Airbnb, and Lyft.[27][28] By 2006, Jessica Guynn of SFGate characterized it as a tiny but influential fund focusing on consumer internet, standing beside Thiel's then extraordinarily successful firm Clarium Capital.[29]
Later, together with Thiel's disillusion with social media companies, the firm has gradually developed into a primary backer of hard tech and defense technology. In 2011, when the social bubble was still expanding, he complained, "Is Twitter worth $7 billion?" At this time, the Founders Fund had developed a portfolio in artificial intelligence, biotech and space technology. In 2017, it published the manifesto "What happened to the future?", written by Bruce Gibney. The manifesto denied that the Internet's potential had been exhausted, but emphasized that the Founders' Fund would focus on ambitious projects that resolved real challenges. The original subtitle was Thiel's famous motto "We wanted flying cars, instead we got 140 characters."[30][31][32][33]
Julie Bort, the venture editor at Techcrunch remarks that it boasts perhaps the most formidable defense portfolio in the Silicon Valley.[34] The Founders Fund, Andreessen Horowitz, America's Frontier Fund, as well as the leaders of these firms, namely Peter Thiel, Marc Andreessen and Eric Schmidt, are often considered the dominance forces in the new defense tech domain.[35][36][37]
The firm also turned to investing in companies in both early and later stages of development. Its first fund dedicated to late-stage startups was created in 2019.[38][39]
Structure-wise, there are three directors, each with powers to veto over any deals over $10 million.[40][41] It is known, though, as in his other companies, that Thiel prefers to surround himself with people who share his thinking and loyal to him, and often manages to steer them to partnership, as seen in the cases of Keith Rabois,[42] Sean Parker,[43] Max Marmer[44] or Trae Stephens.[45][46] The tech writer Mario Gabriele[47] writes that, "At the heart of Thiel’s power, influence, and wealth is Founders Fund. No organization has benefited more from his singular abilities, and those of the team he has assembled, than the venture firm."[48]
Thiel and other partners invest substantial amounts of their own money in the fund. Thiel contributed $38 million to the Founders Fund's Fund 1 (2005). In 2023, Thiel invested $920 million (27%). By late 2018, the firm was returning $4.60 to its investors on every dollar invested. The industry average of that year was $2.11.[49][48]
In October 2024, the Founders Fund hosted the invite-only "Hereticon: Apocalypse Ball", and event they described as "a conference for thoughtcrime", to display and celebrate "technologies and projects so ambitious, they will ultimately transform our world for the better – or destroy it". The invitation reads, "Maybe if you are not trying to destroy the world, you are not trying hard enough".[50][51]
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Personnel
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By April 2025, Peter Thiel, Napoleon Ta and Trae Stephens are listed as fund directors.[52][53]
Ken Howery, co-founder and former partner, was also a co-founder of PayPal and the Founders Fund's first chief financial officer. At the Founders Fund, he led or co-led investments in Facebook, Quantcast, ZocDoc and Geni. He is now a diplomat, having served as the U.S. ambassador to Sweden, and has been confirmed by the Senate as the next U.S. ambassador to Denmark [54][55] In his college years, he was the editor-in-chief of The Stanford Review, a student newspaper found by Thiel.[56]
Keith Rabois is another PayPal Mafia member. His connection with Thiel began when he served in The Stanford Review's staff under Thiel (When Howery joined Stanford, Thiel and Rabois had graduated). He left Khosla Ventures to join the Founders Fund in 2019. He returned to Khosla in 2024.[56][57][58][59]
Bruce Gibney is also a former Stanford Review editor-in-chief. At Stanford, he was also Howery's roommate. He and his family were early investors in Confinity, which later formed PayPal. He worked for Thiel at Clarium Capital, where he advised Thiel on the $500,000 investment in Facebook. Later, he moved to the Founders Fund and worked as growth partner. He left in November 2012. He also works as a writer and litigator.[60][61][62][63]
Sean Parker worked at the Founders Fund between 2006 and 2014. In 2010, when the Founders Fund invested in Spotify, he became a member of Spotify's board. He is also the founder of the Parker Foundation, an philanthropic organization.[64][65]
In 2016, Bloomberg noted that Founders Fund added roughly one member to their investment team per year. Cyan Banister was the Founders Fund's first female investing partner.[66] In 2019, she helped organize a protest in solidarity with Hong Kong protesters and urged Silicon Valley to sever the ties with China.[67] She married PayPal Mafia member Scott Banister. Now she leads Long Journey Ventures alongside Arielle Zuckerberg, sister of Mark Zuckerberg.[68]
Currently the sole female partner is Lauren Gross, also the COO, who leads all non-investment activities from legal to finance.[69]
Trae Stephens, also a partner, has played an important role in co-founding and developing companies incubated at the Founders Fund, including Anduril Industries (where he is now chairman), Sol (at one point Sindarin Inc.), which develops a wearable e-reader,[70][71] Varda Space Industries (co-founder, alongside Thiel fellow Delian Asparouhov and former SpaceX engineer Will Bruey; also director),[72] and Valinor Enterprises. In 2024, he co-founded Valinor alongside former Palantir's senior vice president Julie Bush (CEO), General Catalyst's Paul Kwan and Red Cell's Grant Verstandig.[73][74] The team is sourced from Palantir Technologies, Anduril Industries and Helsing. The firm also holds strategic relationships with these companies.[75][76] Valinor participates in Anduril's Lattice Partner Program,[77] and the two companies are also members of the Defense Industrial Base Consortium.[78] Stephens also sits on the board of Flexport (he led the Founders Fund's investment in the company).[79] Stephens had initially worked for Palantir. Alex Karp, the CEO, told him that he would not let Stephens meet Thiel because he would be poached from Palantir. Karp managed to keep the two separated for two years, until 2012. Stephens began to work for the Founders Fund in 2013.[80]
Ryan Petersen of Flexport is a partner. In 2016, reacting to Peter Thiel's support for Trump, Petersen said that he regretted to have accepted investment from the Founders Fund.[81] In 2023, he decided to join the fund though.[82]
Tristan Abbey worked at Clarium Capital and the Founders Fund. He is currently the 11th administrator of the U.S. Energy Information Administration. He was an editor at The Stanford Review too.[83][56]
Delian Asparouhov is currently a partner.[84] A Thiel fellow, he founded the sơace company Varda Space Industries together with former SpaceX engineer Will Bruey. Varda works on in-space manufacturing, especially in-space drug manufacturing, and also provides a testbest for hypersonic technology as well as "materials for heat shields, navigation systems and flight computers" for the U.S. Department of Defense. In 2025, they raised $187 million in funding. The founders emphasize that the technologies they use are not new, what is new is the innovative model that combines all elements together.[85][86][87][88] In 2025, the startup carried out a Mach 25 plus mission together with the Air Force Research Laboratory (AFRL) and NASA's Ames Research Center.[89] The Founders Fund is the incubator of the startup and one of its financial backers.[72][85] In 2025, the Founders Fund invested $43 million in Asparouhov's home country Bulgaria's satellite startup EnduroSat.[90]
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References
External links
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