Peter Thiel Net Worth

What is Peter Thiel's net worth?

Peter Thiel is a German-born American entrepreneur, hedge fund manager and venture capitalist who has a net worth of $7 billion. Peter made his first fortune as a co-founder of PayPal. He made another major fortune several years later when he became the first outside investor in a company that was then called TheFaceBook.com. In 2004, Thiel gave Mark Zuckerberg – who was by that point on sabbatical from his Sophomore year at Harvard – $500,000 in exchange for a 10.2% stake in the nascent social network company. The investment made Thiel a fortune. Though he sold the vast majority of his Facebook shares fairly soon after the company's IPO, he still continued to sit the company's Board of Directors through 2022. Outside of Facebook he has poured his fortune into dozens of other investments, most notably the company Palantir.

Early Life and Education

Peter Andreas Thiel was born in Frankfurt am Main, West Germany on October 11, 1967. The family migrated to Cleveland when Peter was one. They moved several more times for his father's work, including to South Africa, before eventually settling in Foster City, California. He attended Bowditch Middle School in Foster City, followed by San Mateo High School, then Stanford, then Stanford Law School.

Upon graduating from Stanford Law, Thiel clerked for a judge, then moved to New York City where he got a job as a securities lawyer. In 1993 he began working as a derivatives trader at Credit Suisse. In 1996, as the dot-com boom was beginning to grow, he moved back to the Bay Area where he raised $1 million from friends and family to launch a venture capital company.

PayPal

In the summer of 1998 a 23-year-old Stanford PhD student named Max Levchin attended a lecture being given by Peter. The two struck up a friendship and soon Peter provided Max the funds he needed to launch what became PayPal. Max's idea intentionally was to build a payment system to allow payments to be sent between Palm electronics devices. Peter also eventually served as the company's Chairman and CEO.

The company leased an office space in downtown Palo Alto. By total coincidence, a rival digital payment company called X.com was leasing space on the same floor. X.com was founded by Elon Musk. Unlike PayPal's plan to facilitate payments between Palm devices, X.com was working on a system for sending payments over the fledgling World Wide Web.

As competition and venture capital fund spending increased, PayPal and X.com eventually agreed to merge. Thiel left soon after the merger was finalized and Elon Musk became CEO of the combined company which adopted PayPal as its name. In September 2000 PayPal's board ousted Elon as CEO and brought back Thiel to run the company.

PayPal was acquired by eBay for $1.5 billion in 2002. At that point Peter's 3.7% stake was worth $60 million. At that point Elon owned 11.7% and therefore earned around $175 million.

Clarium Capital Management

After PayPal, Peter used $10 million of his windfall to launch Clarium Capital Management, an investment management and hedge fund company.

In 2003 he launched California-headquartered analytical software company, Palantir Technologies, where he sits on the chairman board.

Facebook

In August 2004, Thiel invested $500,000 to acquire a 10.2% stake in Facebook. He was the company's first outside investor. When Facebook went public in 2012, Thiel sold $638 million worth of his equity. In August 2012, he sold nearly all of his remaining stake for $395 million. For what it's worth, as of this writing, a 10% stake in Facebook would be worth $86 billion. He has also made early investments in companies such as LinkedIn, Yelp, Stripe, Quora, Yammer, just to name a few.

Other Achievements

Thanks to his contributions to technology, entrepreneurship, and finance, Thiel has earned various recognition and awards including the one by the World Economic Forum, which honored Peter as a Young Global Leader. In addition to the above, he has been an active participant in numerous philanthropic, academic, and cultural causes. Primarily a supporter of the Committee to Protect Journalists, Peter supports the Singularity Institute for Artificial Intelligence and the medical charity SENS Foundation, as well.

Peter remains active at his alma mater, and has taught at Stanford Law School. As for his Thiel Foundation, it gives young entrepreneurs $100,000 over two years to skip college and pursue their business ideas instead. While he is encouraging students to choose business over college, Peter himself received a BA in Philosophy from Stanford University and a JD from Stanford Law School.

$5 Billion Roth IRA

An investigative report by ProPublica published in June 2021 revealed that Peter Thiel's Roth IRA account is worth around $5 billion. How did he pull that off?

Peter bought his founder equity shares in PayPal with money from his Roth IRA. He paid $1,700 for 1.7 million shares at $0.001 per share. When eBay bought PayPal in 2002 for $1.5 billion, those shares were worth $28.5 million. Thanks to the intricacies of a Roth IRA, the gain was entirely tax free. Over the next two decades Thiel used that $28.5 million to make a number of additional investments, INCLUDING the $500,000 check he wrote to Mark Zuckerberg to buy 10% of Facebook in 2004. As we detailed previously, Thiel ultimately sold off his entire Facebook stake for around $1 billion all-in. Over the years he has continued to invest in other startups, to the point where the value of his Roth IRA reached $5 billion by the time ProPublica published its investigation. As an aside, had Peter held on to his 10% stake in Facebook, today that investment alone in his tax-free Roth account would be worth $80-$90 billion.