Billionaire investor Peter Thiel, who wrote Facebook its first check and invested heavily in SpaceX, is looking to raise almost $3 billion to invest in late-stage startups that have yet to go public.
The Wall Street Journal is reporting that Theil’s venture capital firm, Founders Fund, intends to shovel money into companies like payments outfit Stripe and data analysis firm Palantir Technologies.
Until now, the company has generally backed newer companies, so the new direction signifies a strategy shift. According to the report, Founders Fund is investing more money in later-stage companies with the goal of keeping a stake and having input in how the firms are run.
“Winning in venture means riding your winners all the way to the finish line,” said Jeremy Liew, a partner at Lightspeed Venture Partners. He noted that investment firms need to make sure they keep a high ownership percentage: “If you can’t continue to be a major source of financing, you get diluted.”
Of the $2.7 billion that Founders Fund aims to raise in the next year, around $1.5 billion will go toward older companies. The rest will look be slated for newer companies.
As more companies are staying private longer, they are leading a trend called growth-stage financing, which involves investing in mature but still private companies. Founders Fund said companies that stay private for an extended period of time can be more stable, making them better investments than flashy startups, even if the return is less dramatic.
Next year, Founders Fund will host Hereticon, aimed at what it calls “heretical thinkers.”
“Troublemakers are essential to mankind’s progress, and so we must protect them,” the company said when announcing the event. Thiel and other partners will provide about 20 percent of the new funds’ capital.
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