The most controversial new venture capital firm to emerge from Silicon Valley this decade has just raised an investment fund of $220m, sealing its place as a prominent financier of the latest internet boom, reports the FT on Tuesday.
Founders Fund, whose reputation rests heavily on an early investment made in social networking site Facebook nearly three years ago, has already attracted attention partly because of its partners’ outspoken attacks on alleged flaws in the traditional VC way of doing business, notes the FT.
Along with the abrasive personalities of some of its backers and their unashamed ambition to uncover the next Google, the fund has generated both intense interest and notoriety in the clubby world of Silicon Valley finance.
Like the young men who set up Benchmark, Founders Fund’s four partners have embraced their role as the industry’s latest Young Turks. According to the FT, they are led by Peter Thiel, 40, a former Wall Street derivatives trader who became chief executive officer of internet payments company PayPal and who now also steers one of the biggest “macro” hedge funds, Clarium Capital.
Another partner is Sean Parker, 28, who while still a teenager co-founded Napster, whose initial song-swapping service was declared illegal, and whose subsequent entrepreneurial career has involved a period as president of Facebook.
The partners have sought to capitalise on their entrepreneurial record to set themselves apart, drawing on a tension in the Valley between entrepreneurs and venture capitalists.
“The pendulum is finally swinging back” as a surplus of capital puts entrepreneurs in the driving seat, said Parker, adding: “There are no investment bankers or MBAs at Founders Fund.”