The San Francisco-based firm is circulating information to investors now and expects to close the fund in the first quarter, according to a presentation obtained by Bloomberg News. As much as 70 percent of the fund will go toward new investments, with the rest dedicated to additional rounds.
Thiel, a co-founder of PayPal, started Founders Fund in 2005 shortly after writing the first check to Facebook. The firm has since raised $1.15 billion and backed companies including Elon Musk’s Space Exploration Technologies Corp., software maker Palantir Technologies Inc. and business software maker Yammer Inc., which Microsoft Corp. (MSFT) bought in 2012 for $1.2 billion.
Thiel’s investment team includes other PayPal co-founders Ken Howery and Luke Nosek and former Google Inc. executive Brian Singerman.
The venture industry is coming off a big year, highlighted by the initial public offering of Twitter Inc. (TWTR), which is now valued at over $35 billion. At least 10 venture firms generated $1 billion or more from IPOs and acquisitions in 2013, after a decade during which the industry trailed the stock market.
Founders Fund will take a 2.5 percent management fee on the new fund and keep 20 percent of the profits from investments, according to the presentation. The firm raised its fourth fund in late 2011, when it brought in $625 million to invest in areas such as aerospace, robotics, education and artificial intelligence.
Thiel, 46, remains on the Facebook board even though he sold almost all his shares. Thiel made more than $1 billion from his early bet on Facebook and unloaded more than 80 percent of his pre-IPO stake within three months after the May 2012 offering.
Susan MacTavish Best, a spokeswoman for Founders Fund, didn’t respond to requests for comment.