Founders Fund Raises $250 Million for Third Venture Fund

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Jul 19, 2010, 06:37 ET

SAN FRANCISCO, July 19 /PRNewswire/ -- Founders Fund, the venture backer of companies including Facebook, Spotify, and SpaceX, has closed its third venture fund. The Founders Fund III LP and its parallel funds were oversubscribed, reaching the firm's cap of $250 million in commitments, making the Fund III suite the firm's largest yet. The substantial majority of commitments came from limited partners of the firm's prior funds, joined by a small number of new investors.

Founders Fund is managed by Peter Thiel, Ken Howery, Luke Nosek, and Sean Parker, all of whom were company founders before becoming venture capitalists. Founders Fund seeks to eliminate the traditional tensions between venture capitalists and start-ups through a unique, founder-friendly approach. "Our goal is to provide as much support for a company as it requires, without interfering with an entrepreneur's vision for that company," said Peter Thiel. "In our experience that leads to the best returns for our investors." "Founders Fund has been an incredible partner for Quantcast; they've offered outstanding advice and guidance while giving us the freedom to grow the business in the ways we think best. Quantcast's tremendous growth testifies to the effectiveness of that model," said Konrad Feldman, CEO of Quantcast, the audience insights and targeting company backed by Founders Fund.

Fund III intends to leverage the firm's experience in consumer-internet, as well as to expand its investments in companies pursuing revolutionary solutions to major science and engineering problems. "As companies like Spotify make clear, consumer internet continues to present tremendous opportunities," said managing partner Sean Parker, who previously served as the founding president of Facebook and co-founder of Causes (both Founders Fund investments), and who also co-founded Napster and Plaxo. "And as the launch of SpaceX's Falcon 9 demonstrates, ambitious engineering projects can also generate terrific value," said Luke Nosek, a Founders Fund managing partner and a director of SpaceX.

According to Ken Howery, "Despite years of cynicism and low returns in the industry, our companies show that there are compelling opportunities in several categories for bold investors." "I worked with the partners of Founders Fund when I was at PayPal, and their expertise in consumer internet is second to none. Having worked with them at Palantir and now at RoboteX, I can say that they are the rare VC that understands both consumer-side and hard engineering and that they invest with conviction," said Nathan Gettings, CEO of RoboteX, which makes multi-purpose robots used by police agencies, SWAT teams, and civilian users. Gettings is also CTO of Founders Fund portfolio company Palantir, the analytical software firm that helped track down the perpetrators of the attacks on the Dalai Lama's computers.

"We're delighted that our limited partners have backed us for a third fund," said Howery, "and we'll use that fund to continue supporting transformational companies."

ABOUT FOUNDERS FUND

Founders Fund is managed by seasoned entrepreneurs Peter Thiel, Ken Howery, Luke Nosek (co-founders, PayPal) and Sean Parker (founding president, Facebook; co-founder Plaxo, Causes, Napster) to support early-stage companies. Founders Fund has made early investments in some of the most prominent ventures of the past decade, including Facebook, Causes, Palantir Technologies, Quantcast, and SpaceX. The firm, headquartered in San Francisco, pursues a founder-friendly investment strategy that provides maximum support and minimum interference to world-class entrepreneurs.