Founders Fund

Founders Fund is an American venture capital firm based in San Francisco, California. Founded in 2005 by Peter Thiel, Ken Howery, and Luke Nosek, it manages roughly $17 billion in assets as of 2025.¹ The firm was the first institutional investor in SpaceX and Palantir Technologies, and an early investor in Facebook.¹

Founding and early years

Thiel, Howery, and Nosek organized Founders Fund in early 2005 and raised its first fund of $50 million from individual entrepreneurs and angel investors.¹ All three were PayPal alumni — Thiel had been CEO, Howery CFO, and Nosek VP of marketing — and their collaboration at PayPal spawned a network of founders and investors sometimes called the "PayPal Mafia," whose members went on to found or lead companies including Tesla, LinkedIn, YouTube, and Yelp.¹ Sean Parker, co-founder of Napster and ex-president of Facebook, joined in 2006.¹

Thiel had made a personal $500,000 angel investment in Facebook in 2004, before Founders Fund existed.² That position eventually returned roughly $1 billion to Thiel personally.² Founders Fund participated in subsequent Facebook funding rounds as an institutional investor.¹

The firm raised a second fund of $220 million in 2007, a third of $250 million in 2010, and a fourth of $625 million in 2011.¹ In 2014, Founders Fund raised a $1 billion fifth suite of funds, bringing aggregate capital under management to more than $2 billion.¹ A sixth fund of $1.3 billion followed in 2016, bringing the total above $3 billion.¹

The hard tech thesis and SpaceX

In 2007, Founders Fund published a manifesto written by partner Bruce Gibney titled "What Happened to the Future?" Its subtitle was Thiel's aphorism: "We wanted flying cars, instead we got 140 characters." The manifesto argued that venture capital had become too focused on incremental social media products and was neglecting aerospace, biotechnology, energy, and transportation — the sectors that would reshape the physical world.¹

The firm's most consequential investment followed this thesis. Nosek pushed for an investment in SpaceX in 2008, when the rocket company was vulnerable after three failed launch attempts.¹ Thiel was persuaded partly by the opportunity to repair his relationship with Elon Musk, which had frayed during the PayPal years (Musk has said Thiel declined to invest in Tesla partly due to skepticism about climate change).¹² Founders Fund invested approximately $20 million in SpaceX's Series B round, according to contemporaneous reporting.¹ As of 2025, that position was valued at approximately $18.2 billion according to the Generalist's analysis.²

Alongside Palantir, which Thiel co-founded in 2003 and which Founders Fund backed from inception, returning an 18.5x multiple and $3.1 billion in distributions, the SpaceX position anchored the firm's identity as a backer of hard technology.² Founders Fund invested in DeepMind in 2011, before the AI lab was acquired by Google in 2014.¹ It was also an early investor in Airbnb, Stripe, and Spotify.¹

The Gawker lawsuit and Thiel's politics

In May 2016, Forbes and the New York Times reported that Peter Thiel had secretly funded Hulk Hogan (Terry Bollea)'s lawsuit against Gawker Media, spending roughly $10 million on legal expenses.⁶⁵ Thiel had been outed as gay by Gawker's site Valleywag in 2007, and had spent years looking for a way to challenge the company through the legal system.⁵ The lawsuit resulted in a $140 million judgment against Gawker, which filed for bankruptcy and was sold to Univision.⁵ Press freedom advocates including the Committee to Protect Journalists argued that billionaire-funded litigation against media outlets posed a threat to press freedom.⁵

Thiel spoke at the 2016 Republican National Convention in support of Donald Trump, becoming one of the few prominent Silicon Valley figures to endorse Trump publicly.¹ In 2024, JD Vance — a former Mithril Capital partner who had been introduced to politics by Thiel — was elected vice president.¹

Partner departures and structure

Founders Fund's partnership has seen significant turnover. Keith Rabois departed for Khosla Ventures in 2013.¹ Sean Parker left his partner role in 2014.¹ Luke Nosek, one of the three original co-founders, departed in 2017 to launch Gigafund, a vehicle focused on SpaceX and other Musk companies.¹ Brian Singerman, who had been with the firm since 2008 and was one of its highest-performing partners, left in the early 2020s.¹ Kevin Hartz and Bruce Gibney also departed as partners.¹ Cyan Banister, who joined as a partner after making angel investments including in SpaceX, left the firm in 2022.¹

The firm operates with three directors who hold veto power over any deal exceeding $10 million.¹ As of April 2025, the directors are Peter Thiel, Napoleon Ta, and Trae Stephens.¹ The sole female partner is Lauren Gross, who serves as chief operating officer and leads all non-investment activities.¹ Ta is described by the Generalist as the investor behind Founders Fund's best-performing growth investments; he has reportedly asked his team not to submit his returns for the Forbes Midas List.² Gross, who joined as Thiel's assistant from Citigroup in 2005 and rose to become COO, is responsible for scaling the firm's assets under management from millions to billions.² Ryan Petersen, founder of Flexport, joined as a partner in 2023.¹ Delian Asparouhov, a Thiel Fellow and co-founder of Varda Space Industries, is currently a partner.¹

Defense tech and Anduril

Trae Stephens, who joined the firm in 2013 after working at Palantir, has played a central role in Founders Fund's defense portfolio.¹ Stephens co-founded Anduril Industries in 2017 alongside former Palantir colleagues and Palmer Luckey (creator of the Oculus VR headset).¹ Founders Fund invested $1 billion in Anduril's 2025 Series G, its largest single investment in the firm's history.¹ Anduril builds AI-powered surveillance towers and autonomous systems for the U.S. military and border agencies; its 2025 round raised $2.5 billion in total, the second-largest sum invested in a defense company that year.¹

Stephens also co-founded Varda Space Industries (which focuses on in-space manufacturing) and Valinor Enterprises.¹ TechCrunch described Founders Fund as having "perhaps the most formidable defense portfolio in Silicon Valley."⁴

Growth funds and recent performance

Founders Fund raised its first dedicated growth fund in 2020 alongside its seventh flagship fund, totaling $3 billion in new capital and bringing total assets under management above $6 billion.¹ In 2022, the firm raised an eighth flagship fund and second growth fund totaling over $5 billion, pushing total AUM above $11 billion.¹

In March 2023, Thiel cut the size of the eighth venture fund in half, from roughly $1.8 billion to about $900 million, arguing that "venture capital is due for a slimdown."¹ The move, which caused internal resistance, was unusual in an industry where firms rarely return committed capital.¹

In mid-2025, the firm closed its third growth fund, Founders Fund Growth III, at $4.6 billion for late-stage investments, surpassing its initial $3 billion target.³⁴ As of early 2026, Founders Fund was nearing a $6 billion close for its fourth growth fund (Growth IV), less than a year after closing Growth III.⁴⁹ The Growth IV fund was reported to invest approximately $460 million per company across roughly 10 portfolio companies, compared with $225 million per company across 15 companies in Growth II and $55 million per company across 31 companies in Growth I.¹¹⁰

Thiel and other partners invest substantial personal capital in the funds. Thiel contributed $38 million to Fund 1 in 2005.¹ The firm's fourth fund (2011 vintage) returned $4.60 to investors on every dollar invested, compared with an industry average of $2.11 for the same vintage.⁷ One early fund delivered 18x distributed paid-in capital, according to the Generalist's reporting.²

Hereticon

In October 2024, Founders Fund hosted the invite-only "Hereticon: Apocalypse Ball," described as "a conference for thoughtcrime."¹ The invitation read: "Maybe if you are not trying to destroy the world, you are not trying hard enough." The event continued a tradition of provocative gatherings that the firm has used to cultivate its contrarian brand.¹

Related firms

Thiel's financial network extends beyond Founders Fund itself. In 2010, Clarium Capital alumni James Fitzgerald and Andrew McCormack founded Valar Ventures with Thiel's backing, starting with a focus on New Zealand investments before expanding to Europe and emerging markets.¹ Valar's best investment was Xero, the New Zealand accounting software company: the $4 million invested in 2010 was worth approximately $54 million by 2017.¹

In 2012, Thiel and former Clarium managing director Ajay Royan launched Mithril Capital, a $402 million growth equity shop.¹ Former counsel Crystal McKellar alleged in 2019 that Royan had misled investors, and Jim O'Neill filed a separate lawsuit alleging wrongful termination and "toxic" management.⁷ The FBI made inquiries into Mithril, and as of 2023 the firm was reported to have approximately $100 million left to deploy.⁷