Back in 2008, Founders Fund was poised to be the next big, top-five venture firm. It was early to the Web 2.0 wave, backing much of the companies coming out of the famed PayPal mafia. It had the monster hit of Facebook, a solid home run in Yelp, and a nice double in Slide. As the firm who got the Web before any others, Founders Fund looked like the unfolding Web world would be its oyster, and it would become the new Sequoia Capital.
But Founders Fund is a firm built out of Peter Thiel’s contrarian DNA. It was only natural that it would veer sharply as the rest of the venture pack caught up to the Web 2.0 hype.
That included the rogue move of hiring Sean Parker as a partner. He was yet to be the toast of Hollywood films, and the move was considered incredibly controversial at the time. Thiel’s logic was that Parker had brought him Facebook, and if he brought him one more Facebook, it’d be well worth the risk.
Meanwhile, the firm took a turn from champion of the consumer Web’s awakening to a champion of big ideas, science, robotics, space travel, and all the areas of technology that had fallen out of favor. The bold “What happened to the future?” manifesto on its site seemed to turn its back on the roaring social media movement from which it had made its name. With that went some of Founders Fund’s own buzz. After all, other firms like Kleiner Perkins and Khosla Ventures had also championed bold, save-the-world ambitions, only to revert to backing a lot of Web companies once the returns were elusive. (Thiel and I talked about this a good deal when he joined us for PandoMonthly a few months ago. Go here to watch the video.)
But I’ve noticed for the past three weeks, Founders Fund has quietly been the common denominator in the industry’s biggest stories. Quick. What was the top story two weeks ago? Facebook, duh. Founders Fund was one of the first investors. Even the Nasdaq couldn’t make that IPO bad news for the firm.
Last week? SpaceX launched the first ever commercial spacecraft to visit the International Space Station, kicked off a new inter-American space race, and rekindled hope for the future of science and real innovation. Founders Fund was the first firm to back the insanely ambitious company, after Elon Musk invested some $100 million of his own into it. That was even less of an obvious bet than Facebook in the early days.
And the story dominating the blogosophere today? Airtime. Not on the level of an IPO or a space station, but it certainly had the celebrity juice. And worth noting: Also a Founders Fund company.
The firm has also backed ambitious companies like Halcyon Molecular, RoboteX, and several audacious health care bets, and more known industry darlings like Palantir, Zocdoc, Yammer, and Spotify. If just a few of these hit big, Founders Fund will have quietly clawed its way back to top fund spoiler status.
Founders Fund has had a great month, not by following the herd but by sticking to its own contrarian knitting. Parker may not have (yet) delivered a Facebook for Thiel, but he did deliver Spotify back before it had a nosebleed valuation. He has helped keep a Founders Fund toe in the social media game with investments in Path and Airtime, even as the Founders Fund Website bemoans a world with 140 characters but no flying cars.
Many of the rest of the portfolio were wild contrarian bets that few other firms would have made. They may yet go the way of SpaceX or become money pit science projects. But few VCs these days have the stones for that kind of risk.
Even with early money in Facebook, Peter Thiel ranked a mere 8th on the Forbes Midas List this year. As more of these once-crazy bets start to mature, expect him to rise in the rankings.
[Disclosure: Thiel is an investor in PandoDaily via Founders Fund.]
[Image by TheAlieness GiselaGiardino²³]