Fund News: Peter Thiel reveals late-stage fund: Mithril

Thiel and co-founders get their nerd on by naming fund after Lord of the Rings substance

Updated 7:22 pm to add interview with Ajay Royan.

Peter Thiel, best known as the unapologetic Libertarian who wrote the first check to a fledgling Facebook, announced Wednesday his new $402 million fund, Mithril Capital Management.  The fund, named after the lightweight but strong metal mined by dwarves in J.R.R. Tolkien’s Lord of the Rings (LOTR, for Vator’s fantasy geek community), will be something of a departure from Thiel’s previous projects by focusing not on early-stage startups, but rather on later stage companies.

The idea is that Mithril will be there to support companies that have moved beyond the traditional venture-backed stage but aren’t yet ready or interested in exiting (think Facebook between 2010 and 2012).

"For companies that are developing radical, world-changing technologies, public markets force management to focus on achieving near term financial benchmarks rather than solving big problems and developing groundbreaking innovations," co-founder and Managing General Partner Ajay Royan told me.  "Additionally, public markets can discourage big transformations in technology and market strategy."

Royan previously worked as Managing Director of Clarium Capital.  Thiel and Royan will also be joined by Jim O’Neill, co-founder of "20 Under 20" fellowship for young tech prodigies.

As to sectors in which Mithril plans to invest, Royan had this to say:

"We're agnostic about sector and geography.  We're focused on the growth stage and transformational technology.  Silicon Valley is a cultural phenomenon which is now global.  Both SV technology (especially advances in bandwidth, networks, software, and computational power), and the approach will offer tremendous opportunities in areas like agriculture, space, transportation, biotech, and energy."

The fact that the fund is focusing on later stage companies factors into that commitment to supporting the full life cycle of the industry disrupting company.  When I spoke with TrueCar CEO Scott Painter earlier this month, he firmly believed that founders should be the ones running their companies, as passion and vision will make the difficult choices that someone who’s in it for the money won’t.  Thiel has a track record of investing in visionaries who don’t just want their companies to survive, but to thrive, so it makes sense that he’s creating a fund for later stage companies, who may be reaching a point where they still have places to go and goals to reach, but have reached a size and scope where traditional venture funding may no longer be an option.