Tech Luminary Peter Thiel Parts Ways With Silicon Valley
Tech Luminary Peter Thiel Parts Ways With Silicon Valley
Billionaire investor frustrated with what he sees as
intolerance of conservatism in tech industry; has discussed resigning from
Facebook board
By Douglas MacMillan, Keach Hagey and Deepa Seetharaman Feb.
15, 2018 7:02 a.m. ET
Billionaire investor Peter Thiel is relocating his home
and personal investment firms to Los Angeles from San Francisco and scaling
back his involvement in the tech industry, people familiar with his thinking
said, marking a rupture between Silicon Valley and its most prominent conservative.
Mr. Thiel has also discussed with people close to him the
possibility of resigning from the board of Facebook Inc., the people familiar
with his thinking said. His relationship with the social-networking
company—where he has been a director since 2005, the year after its
founding—came under strain after a dispute with a fellow director over Mr.
Thiel’s support for Donald Trump’s presidential campaign and a related
confrontation over boardroom leaks with Chief Executive Mark Zuckerberg last summer,
the people said.
However, Mr. Thiel feels he can still help the company
and is likely to remain on the board at least for now, one of the people said.
Mr. Thiel’s plans are part of a broad move by the venture
capitalist, who has ties to dozens of top startups, to reduce his direct role
in the Silicon Valley tech industry that he helped to shape, the people said.
Mr. Thiel has grown more disaffected by what he sees as the intolerant,
left-leaning politics of the San Francisco Bay Area, and increasingly
pessimistic about the prospects for tech businesses amid greater risk of
regulation, they said.
As a result, after spending most of the past four decades
in the Bay Area, the 50-year-old plans to permanently move into the
7,000-square-foot home overlooking the Sunset Strip that he bought six years
ago, a person familiar with the matter said. He also will move Thiel Capital
and Thiel Foundation, two firms that oversee his investments, into new Los
Angeles headquarters this year, the person said.
Mr. Thiel has long stood out in Silicon Valley for his
vocal libertarianism, but he drew heavy criticism from many tech-industry
peers—including fellow Facebook board member Reed Hastings, chief executive of
Netflix Inc. when he backed Mr. Trump’s presidential campaign and later served
as an adviser on his White House transition team.
Mr. Thiel has recently said tech culture has become
increasingly intolerant of conservative political views since Mr. Trump’s
election, an attitude he has said is intellectually and politically fraught.
“Silicon Valley is a one-party state,” Mr. Thiel said
last month at a debate about tech and politics at Stanford University. “That’s
when you get in trouble politically in our society, when you’re all in one
side.”
His concerns are echoed by other conservatives in tech
who say they feel alienated by the industry’s broad embrace of liberal values.
A majority of the tech workers who responded to a recent survey by Lincoln
Network, an advocacy group for conservatives and libertarians in the tech
sector, described the cultural norms of their workplace as liberal. More than
one-third of workers who identified themselves as conservative said the clash
between their views and those of those of colleagues kept them from doing their
best work.
Mr. Thiel has bucked Silicon Valley conventions since his
days as a Stanford University student in the 1980s, when he helped start a
student newspaper to promote conservative views. He co-founded PayPal in 1998
and placed an early bet on Elon Musk’s rocket startup, Space Exploration
Technologies Inc., in 2008. He also has backed more unusual initiatives such as
an institute that advocates creating ocean-based cities outside the reach of
governments.
His involvement with Facebook has been among Mr. Thiel’s
biggest triumphs. He made the first outside investment in the fledgling social
network, paying $500,000 for a 10% stake in 2004. Today, Facebook is valued at
over $500 billion and used by more than two billion people a month. Mr. Thiel
has made more than $1 billion from the investment.
Mr. Thiel also has been an emissary for Facebook to its
large population of right-leaning users. In May 2016, after media reports that
curators of Facebook’s “trending topics” feature suppressed news about
conservative events and from conservative sources, he helped Facebook convene a
closed-door meeting to smooth things over with a group of prominent
conservatives.
Mr. Thiel’s support for Mr. Trump that year drew
criticism within Facebook, ranging from rank-and-file workers commenting on
employee message boards to Mr. Hastings. In a 2016 email to Mr. Thiel, Mr.
Hastings called his support of Mr. Trump “catastrophically bad judgment” and
questioned his fitness to remain on the board, according to a copy of the message
reviewed by The Wall Street Journal. The contents of the email were reported
last year by the New York Times.
Mr. Zuckerberg publicly deflected the criticism of Mr.
Thiel, saying in March 2017 that demands for his removal were “crazy” and that
“ideological diversity” had become a necessary component of general diversity
in the workplace and boardroom.
Late last summer, the Facebook CEO, concerned about board
discussions becoming public, confronted Messrs. Thiel and Hastings over whether
they had leaked Mr. Hastings’s email to the press, people familiar with the
matter said.
In a phone conversation, Mr. Zuckerberg discussed with
Mr. Thiel whether he should remain on the board, the people said. The Facebook
CEO didn’t explicitly ask Mr. Thiel to resign, someone familiar with the
situation said, and Mr. Thiel said he wouldn’t leave the Facebook board voluntarily.
Mr. Hastings offered to resign if his disagreement with
Mr. Thiel was a distraction, and Mr. Zuckerberg said no, according to someone
familiar with the matter.
While Mr. Thiel has remained a director, in November he
sold 73%, or almost $30 million, of his remaining stake in Facebook, according
to securities filings.
Mr. Thiel has courted controversy unrelated to his
politics. He secretly financed wrestler Hulk Hogan’s lawsuit against online
publisher Gawker Media, which resulted in a $32 million judgment that
ultimately forced the company out of business. He later said the move was
motivated by a Gawker story in 2007 that identified Mr. Thiel as gay, which he
said violated his privacy.
Speaking at the Republican National Convention in 2016,
Mr. Thiel said, “I am proud to be gay.”
Last November, Mr. Thiel demanded that a U.S. Bankruptcy
Court in New York allow him to participate in a continuing sale process for
Gawker.com. Mr. Thiel’s lawyers have argued that he is the “most able and
logical purchaser” for Gawker but that so far his requests to participate in
the sale process have been rebuffed.
The investor’s new projects in Los Angeles will include
the creation of a new media endeavor, one of the people said. Mr. Thiel sees an
opportunity to build a right-leaning media outlet to foster discussion and
community around conservative topics, the person said.
Thiel Capital and Thiel Foundation plan to move their
dedicated staff of about 50 employees to Los Angeles, where they will continue
to oversee Mr. Thiel’s personal holdings, one of the people familiar with his
thinking said. Other investment firms associated with Mr. Thiel, including
Founders Fund and Mithril Capital, will remain in San Francisco, the person
said.
In the past two years, Mr. Thiel has exited the boards of
Zenefits and Asana Inc., cut ties with startup incubator Y Combinator and sold
off the majority of his stakes in Twilio Inc. All are located in the Bay Area.
He still serves on the boards of several companies, including Palo Alto, Calif.
based data-mining firm Palantir Technologies Inc.
Mr. Thiel paid $11.5 million for his Los Angeles home in
2012, according to real-estate data website Property Shark. He also has a home
in New Zealand, where he was granted citizenship in 2011. He has been living
near San Francisco’s Presidio District, where his office is located.
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