Portrait of Peter Thiel
Business · organisation
Wikipedia (opens in new tab)

Peter Thiel on Facebook

First Investor & Board Member (strong)

TL;DR

Peter Thiel was Facebook's first outside investor, taking a significant board seat and later selling his stake for over a billion dollars.

Key Points

  • He made his $500,000 investment in August 2004, acquiring a 10.2% stake in the company.

  • He sold 16.8 million shares for $638 million during the Initial Public Offering in May 2012.

  • He announced in February 2022 he would leave the board after seventeen years to support political candidates.

Summary

Peter Thiel became the first outside investor in Facebook (then "a three-person dorm room") in August 2004, providing a $500,000 angel investment for a 10.2% stake, which also earned him a seat on the company's board of directors. He was comfortable with the founding team pursuing their initial vision, viewing the investment as relatively safe at the time, despite the social network primarily being focused on college campuses. An early key factor in his confidence was the company's success in capturing real identity, unlike prior online social networking attempts.

He maintained a board role for seventeen years, even reportedly helping the CEO time a crucial funding round before the 2008 financial crisis. Following Facebook's 2012 Initial Public Offering, he sold a large portion of his shares, netting $638 million, and immediately sold almost all of his remaining stake after the early investor lock-up period concluded, eventually totaling over $1 billion in cash. He announced in February 2022 that he would not stand for re-election to the board of the parent company, Meta, after that year's stockholders' meeting.

Frequently Asked Questions

Peter Thiel made his $500,000 angel investment in Facebook in August 2004, which was the company's first outside funding. This investment gave him a 10.2% stake in the company at that time.

No, he did not sell all of his stock immediately. He sold a significant portion at the IPO and nearly all the remainder after the early investor lock-up period ended in August 2012. As of early 2022, his holdings had been reduced to a very small number of shares.

Peter Thiel announced in February 2022 that he would not seek re-election to the board of Facebook's parent company, Meta, at the 2022 annual stockholders' meeting. He left after serving for seventeen years.