Facebook Backer Thiel to Give $100,000 Grants to Entrepreneurs
Facebook Inc. investor and board member Peter Thiel plans to make 20 grants of as much as $100,000 apiece to teenagers who have promising ideas for technology businesses.
The investor’s Thiel Foundation will award as many as 20 grants to individuals or small teams of entrepreneurs by the end of 2011, Thiel said today during a technology conference in San Francisco. Some partners at the Founders Fund, the venture capital firm co-founded by Thiel, will act as advisers and mentors to the grant winners.
The grants are aimed at removing some of the barriers, such as heavy course loads and high college costs, that young people face as they try to create businesses, Thiel said in an interview. He was one of the first investors in Facebook, which like Microsoft Corp. and Apple Inc., was founded by a person who hadn’t completed college.
“We need to encourage young Americans to take more risks,” Thiel said. Traditional education steers young people away from entrepreneurship and into steady jobs, he said. “While they are able to get certain types of jobs with it, the problem is they can’t actually do anything that pays less in the short term and may have more value in the long run.”
Thiel contributed to Facebook’s $500,000 first round of funding in 2004, when founder Mark Zuckerberg was 20. Zuckerberg hadn’t completed his undergraduate degree at Harvard University when he began Facebook.
Besides Facebook, other startups created by teenagers in recent years include Halcyon Molecular, a genetic engineering company, and Napster Inc., the music file-sharing site created by programmer Shawn Fanning, Thiel said. He was one of Halcyon’s investors.
The greatest opportunities for new and world-changing businesses may lie in the hard sciences, as opposed to consumer- oriented Internet startups, Thiel said. A backer of rocket builder Space Exploration Technologies, Thiel is exploring investments in artificial intelligence, robotics, biotechnology and aerospace engineering.
Facebook, valued by secondary-share markets at about $30 billion, is undervalued, Thiel said.
A top candidate among Silicon Valley startups for an initial public offering, Facebook is unlikely to make its IPO until 2012, Thiel said. The offering would be one of the biggest in the technology world since Google Inc. went public in 2004.
“They’re focused on building a great product and building a great business around that product,” he said. “Google in some ways did it right by waiting a long time to have their IPO.”
Facebook was likely to put off an IPO until that time to give Zuckerberg more time to gain users and boost sales, three people familiar with the matter said in July.
To contact the editor responsible for this story: Tom Giles at firstname.lastname@example.org.