The Thiel Foundation: Contrarian Philanthropy
Before becoming an entrepreneur and investor, Peter Thiel pursued a more conventional, white-collar path. He moved between jobs as a judicial clerk, a lawyer, and a Wall Street trader. In 1998, Peter Thiel cofounded PayPal with Max Levchin. In 2002, Thiel sold PayPal, used his earnings to launch Founders Fund, and following subsequent investments, became a billionaire.
Thiel believed that society was built on technological revolution, and he was frustrated by a de-prioritization of scientific progress. This led to the creation of the Thiel Foundation. The Foundation focused on three ventures: Imitatio, Breakout Labs, and The Thiel Fellowship. The Foundation’s investments were often controversial, which Thiel welcomed.
René Girard was a professor in the French and Italian departments at Stanford University, who wrote on many topics including culture, religion, philosophy and sociology. Thiel was taken by Girard’s mimetic theory, which holds that human desire is not autonomous, but copied. Thiel found the work helpful in categorizing behavior across disciplines. Thiel cofounded Imitatio in 2007 with Robert Hamerton-Kelly to further Girard’s work across disciplines.
Disappointed by the lack of science funding, Thiel partnered with Lindy Fishburne to start a seed fund for hard science. They observed a funding gap, with little seed money for companies pursuing research that had yet to show commercial validation. Breakout Labs saw its value as its willingness to take risks and become the first funder for many of these nascent-stage companies. The firm provided companies with up to $350,000 and two years of mentorship, helping develop a growth strategy and attract funders.
The Thiel Fellowship
Thiel was intrigued by the fact that college dropouts had created a tremendous amount of value for the economy. He also noted that the cost of college education had outpaced inflation and created a student loan crisis. Thiel created The Thiel Fellowship in 2011, a program that awarded $100,000 over two years to 20 young people under the age of 22 to delay or drop out of college and work on a project. The Fellowship team offered the Fellows mentorship, including connecting Fellows to prospective cofounders, helping them learn about building a start-up and providing them with the resources to scale.