Lecture Notes: Peter Thiel's Path to Billionaire Status

Overview

Common ways to become a billionaire:
- Start and scale a company, maintain equity (e.g., Bezos, Zuckerberg, Musk)
- Invest and compound wealth (e.g., Buffett, Simons)
- Become an employee billionaire (e.g., Cook, Pichai, Ballmer)
Peter Thiel's unique approach:
- Made $10 billion without traditional employment or inheritance
- Acted as a connector between money and businesses
- Emphasized working smarter, not harder

Born October 11, 1967, in Frankfurt, West Germany
Family moved to Cleveland, Ohio, and later settled in Foster City, California
Excelled academically: First in a state math competition, graduated valedictorian
Attended Stanford, majored in Philosophy
- Created and edited the Stanford Review, a libertarian campus newspaper
Pursued law degree at Stanford Law School, graduated in 1992

Brief stint in law:
- Clerked for a judge, then became a securities lawyer
- Left law due to lack of fulfillment
Transitioned to finance as a currency derivatives trader
Worked as a speechwriter for the US Secretary of Education
Returned to California, feeling lost career-wise

Leveraged connections from Stanford and New York experiences
Founded Thiel Capital Management in 1996
- Raised $1 million from wealthy connections
- Focused on seed venture capital, the riskiest form of investing
Financial model: typically 2% management fee and 20% profits (e.g., Clarium Capital: 0 and 25)

Early failures led to long-term success:
- Initial investment in Luke Nosek's web-based calendar failed
- Nosek and Max Levchin pivoted to Confinity, which merged with x.com to form PayPal
- Served as CEO of PayPal (2000-2002) and facilitated its sale to eBay for $1.5 billion
Founded Clarium Capital (2002) and Palantir (2003)
Became Facebook's first outside investor in 2004:
- Invested $500,000 for 10.2% stake
- Investment grew to billions despite dilution and partial sell-off
Broad investment portfolio:
- Invested in startups like Asana, Lyft, Yelp, Airbnb, SpaceX
Early and significant cryptocurrency investments:
- Supported Vitalik Buterin to develop Ethereum
- Predicted digital currency trends since 1999

Peter Thiel's approach: leverage vision, foresight, and connections rather than hard labor
Known for identifying major tech trends (internet, social media, cryptocurrency, AI)
Emphasizes working smarter: using strategic investments and network to create massive wealth