Founders Fund

The firm was organized by Peter Thiel, Ken Howery, and Luke Nosek in early 2005 and raised its first fund of $50 million from individual entrepreneurs and angel investors in January of that year. Sean Parker, co-founder of Napster and ex-president of Facebook, joined in 2006. In 2007, the firm raised a new fund of $220 million.

In 2010, the firm raised its third fund, with $250 million in committed capital, and in 2011, a fourth fund with $625 million of committed capital was raised.

In 2014, Founders Fund raised a $1 billion fifth suite of funds, bringing the firm's aggregate capital under management to more than $2 billion.

In 2016, Founders Fund raised a sixth, $1.3 billion fund, bringing the firm's aggregate capital under management to more than $3 billion.

In 2020, Founders Fund raised a seventh flagship fund and its first growth fund, representing $3 billion in new capital and bringing the firm's aggregate capital under management to more than $6 billion.

In 2022, Founders Fund raised an eighth flagship fund and its second growth fund, representing over $5 billion in new capital and bringing the firm's aggregate capital under management to more than $11 billion.

In March 2023, Founders Fund cut the size of its eighth venture capital fund in half, from around $1.8 billion to around $900 million, to adapt to uncertain market conditions. This was the idea of Thiel, who thought "venture capital is due for a slimdown", which caused some resistance from inside the firm.

In 2025, Founders Fund raised its third growth fund, Founders Fund Growth III, at $4.6 billion for late-stage investments. Julie Bort of TechCrunch remarks that, "Founders Fund is so big and successful that it can always raise an oversubscribed fund should it choose to." The over-subscription seemed to anticipate an era of big VC spending, and also expansion of the defense sector. Meanwhile, CNBC commented that, "Hefty amounts of private capital are likely to be needed for the foreseeable future as the IPO market remains virtually dormant".

The Founders Fund was conceptualized as an early-stage venture capital fund. From the start, it has adopted Thiel's contrarian attitude, and bet early and aggressively on companies with the founders it deemed deserving of trust. Early in its history, it made many investments in internet or social media and health and life science research, among which there were investments in Spotify, Airbnb, and Lyft. By 2006, Jessica Guynn of SFGate characterized it as a tiny but influential fund focusing on consumer internet, standing beside Thiel's then extraordinarily successful firm Clarium Capital.

Later, together with Thiel's disillusion with social media companies, the firm has gradually developed into a primary backer of hard tech and defense technology. In 2011, when the social bubble was still expanding, he complained, "Is Twitter worth $7 billion?" At this time, the Founders Fund had developed a portfolio in artificial intelligence, biotech and space technology. In 2017, it published the manifesto "What happened to the future?", written by Bruce Gibney. The manifesto denied that the Internet's potential had been exhausted, but emphasized that the Founders' Fund would focus on ambitious projects that resolved real challenges. The original subtitle was Thiel's famous motto "We wanted flying cars, instead we got 140 characters."

Julie Bort, the venture editor at Techcrunch remarks that it boasts perhaps the most formidable defense portfolio in the Silicon Valley. The Founders Fund, Andreessen Horowitz, America's Frontier Fund, as well as the leaders of these firms, namely Peter Thiel, Marc Andreessen and Eric Schmidt, are often considered the dominance forces in the new defense tech domain. Camden Mead writes on the website of the Utah Aerospace and Defense Association that, together with Andreessen Horowitz, the Founders Fund "has prioritized investing in revolutionary technologies, including various forms of autonomous vehicles. Both of these firms are relatively new to the defense space but are singlehandedly changing how traditional investors view the aerospace, deep tech, and defense ecosystem."

The firm also turned to investing in companies in both early and later stages of development. Its first fund dedicated to late-stage startups was created in 2019. …

Ken Howery, co-founder and former partner, was also a co-founder of PayPal and the Founders Fund's first chief financial officer. At the Founders Fund, he led or co-led investments in Facebook, Quantcast, ZocDoc and Geni. He is now a diplomat, having served as the U.S. ambassador to Sweden, and has been confirmed by the Senate as the next U.S. ambassador to Denmark In his college years, he was the editor-in-chief of The Stanford Review, a student newspaper found by Thiel.

In 2017, Luke Nosek, one of the co-founders, left the Founders Fund to establish Gigafund, which focuses on space technology and Musk companies like Neuralink and the Boring Company (initially it mainly focused on SpaceX). The other Gigafund co-founder, Stephen Oskoui, is also a former Founders Fund investor. When at Founders Fund. Nosek led the investment in SpaceX and remains a board member ever since. Nosek was instrumental in the investment, at a time SpaceX was vulnerable. Thiel was persuaded, partly out of the desire to mend his personal relationship with Musk due to previous problems at PayPal (Thiel had also previously refused to invest in Tesla – Musk thinks it was because of his skepticism of climate change].

By April 2025, Peter Thiel, Napoleon Ta and Trae Stephens are listed as fund directors.

Currently the sole female partner is Lauren Gross, also the COO, who leads all non-investment activities from legal to finance.

Trae Stephens, also a partner, has played an important role in co-founding and developing companies incubated at the Founders Fund, including Anduril Industries (where he is now chairman), Sol (at one point Sindarin Inc.), which develops a wearable e-reader, Varda Space Industries (co-founder, alongside Thiel fellow Delian Asparouhov and former SpaceX engineer Will Bruey; also director), and Valinor Enterprises. In 2024, he co-founded Valinor alongside former Palantir's senior vice president Julie Bush (CEO), General Catalyst's Paul Kwan and Red Cell's Grant Verstandig. The team is sourced from Palantir Technologies, Anduril Industries and Helsing. The firm also holds strategic relationships with these companies. Valinor participates in Anduril's Lattice Partner Program, and the two companies are also members of the Defense Industrial Base Consortium. Stephens also sits on the board of Flexport (he led the Founders Fund's investment in the company). …

The Founders Fund have incubated or co-incubated Palantir Technologies, Anduril Industries, General Matter, Valinor, Varda Space Industries, which are all defense company; only Sol is a non-military company.

John Mac Ghlionn of the Boston Globe describes "Small Tech", which he defines as "a cluster of small Silicon Valley firms" that represents the "AI-driven military-industrial complex" with Palantir as "its public face", writing that, "The deeper roster runs through Anduril, Shield AI, Saronic, Scale AI, Vannevar Labs, Skydio, Epirus, and a dozen more startups bankrolled by the venture capital firm Founders Fund, Andreessen Horowitz, and Peter Thiel's wider network." Palantir itself is a relatively small company, with a small number of employees (around 4,000, which has barely increased through the years). The Economist notes that Palantir, Anduril, and SpaceX, sometimes dubbed "neo-primes", generally dislike "cost-plus" contracts where the government covers all expenses and adds profit, because that model, while necessary for large, complex programs with unpredictable initial costs, breeds laziness. Instead, the new defense leaders often prefer fixed-price deals in which they cover the initial cost of research and development and earn fat margins if they deliver on time and within budget: "The contract structure helps to keep them lean, and gives them an incentive to upgrade their products frequently, rather than building new weapons or systems from scratch each time."

Thiel combines the investments of different funds that he founds or invests in for activities in the defense sector. Intelligence Online notes that since the 2010s, he has gradually cornered the private satellite imagery market through multiple investments by his different funds (Y Combinator, Founders Fund, Mithril), then sold this essential service to governments in the U.S. and other countries as part of a global strategy. Via Mithril Capital, he invested in Spaceflight Industries (from which BlackSky was spun out) and helped it to acquire OpenWhere, which developed software to merging imagery data with data from other sources. Via Founders Fund, he invested in Planet Labs, which has acquired Alphabet's Terra Bella. …