VentureBeat

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The Founders Fund, a maverick venture firm run by veteran entrepreneurs, has just raised a new fund of $220 million.

The firm will invest money from the fund, officially called Founders Fund II, in 15 to 20 early-stage startups.

The San Francisco firm has made a point of giving power to entrepreneurs in ways that many competing firms don’t. In its view, this focus is fixing the venture business model.

Specifically, it will continue its practice of offering start-up founders Series FF stock, that can be converted to preferred stock during following rounds of funding (more on FF stock, here). Preferred stock can let founders sell a portion of their stock while still running their companies. The firm also says it gives entrepreneurs additional voting power, to help them maintain direct control of their companies as additional investors are brought on board.

The first Founders Fund was $50 million from personal investments, and from select individuals. This time around, the money comes from institutional investors. In an interview Monday at their office at the Presidio, the firm’s partners said the investors had all requested confidentiality. The Wall Street Journal reports one institutional investor was Stanford University’s endowment arm — a backer of other Silicon Valley venture firms.

The Founders Fund managing partners are some of the younger investors in the Valley. They include two of many PayPal co-founders, Luke Nosek and Ken Howery (ages 32), former PayPal chief executive and hedge fund investor Peter Thiel (age 40) and iconoclast entrepreneur Sean Parker (age 28, pictured - our coverage of him joining the fund, here). The partners see themselves as bringing venture capital back to its roots.

The Journal article says some institutional investors were skeptical of the partners and passed on the opportunity to put in money. Parker confirmed that the fund-raising process turned out to be more time consuming than the firm had expected. But he also said limited partners had invested because their model — namely, a venture firm run by founders with experience — was needed in the industry. The firm originally sought to raise $150 million, but ended up raising $220 million.

Early Silicon Valley venture capitalists were entrepreneurs who made their money and wanted to invest in the next generation, Parker said. These days, as The Founders Fund partners put it, many VCs are investment bankers and MBAs who don’t have experience actually founding successful companies. [Update: An astute reader points out below that some of the earliest venture capitalists, including some of the best of them, were not entrepreneurs. This is true. However, there's also no denying that the "institutionalization" of venture capital in the late 1990s, which saw many funds grow to $1 billion in size, and having 8 or more partners, ushered in an era of the low-risk "career path" to VC, which hadn't existed in the early days.]

The resulting problem, as Parker says, is that entrepreneurs often know how to run their companies better than investors do, but are prevented from doing what they think is best. One example he gives is Friendster, which faced crucial “scaling” problems as it grew, several years ago. The load on Friendster’s servers, caused by the expanding number of calculations it was performing, was tremendous (see our discussion of the company’s graph server problem). That company’s venture backers couldn’t imagine a Silicon Valley tech company having scaling as its biggest problem, and they ignored its founder’s pleas for a greater focus on solving the problem immediately. Partly as a result of continuing site performance problems, users gradually left to other social networking sites.

Parker has learned such lessons first-hand. He helped found formative music-sharing service Napster and contact aggregator Plaxo, and was the president of Facebook during its early years. As many in the Valley know, Parker has had a long and turbulent history with established investors, especially Michael Moritz of Sequoia and other VCs who served on the board of Plaxo. He was also a friend of Friendster chief executive Jonathan Abrams, and witnessed through that relationship how even a company like Friendster, with a large lead in the social networking sector, and backed by the two big-name VC firms, Kleiner Perkins and Benchmark, could lose its way.

After surviving Plaxo and watching Friendster disintegrate, Parker took an uncommon approach to bootstrapping Facebook. When the company needed capital to build out its infrastructure in order to match its exploding growth, Parker obtained $250,000 in debt, which prevented him and the other early Facebook employees from having their stock diluted.

Then, Thiel stepped in with $500,000 — Facebook’s first angel investor.

Current Founders Fund investments include leading social network Facebook (via Thiel’s investment, from what we understand), along with widget-maker Slide, online genealogy mapper Geni, search engine Powerset, web analytics company Quantcast, and land-line calling service Ooma.

The Founders Fund may spend similarly small amounts of money on early stage companies, the partners say — whatever the startup needs. It will focus on what it knows best: Consumer internet companies, including social networking applications, especially in the US. However, the partners stress that they are “contrarian” to investment trends and will put money into any team they believe in, anywhere in the world, across industries.

Update: The Journal reports that the firm’s first fund, raised in 2005, had a “return of 23 percent net of fees,” which we’ll assume means a 23 percent “internal rate of return,” since that is the venture capital industry norm for measuring fund returns. This means it has earned 23 percent each year since investment began, which is much more than industry average. Investments typically take years to yield profits, and so most funds yield a negative IRR until their third year. We’re confirming that the WSJ meant IRR.

Ron Conway, the most prolific investor in the latest wave of Internet companies, is hot for video companies, and ways to monetize them.

However, he’s upset by some recent investment practices, he says. Some VCs are offering entrepreneurs cash out of financing rounds, he tells reporter Kara Swisher. Basically, he says, it’s a “cash bonus for going with that VC….a payoff or a bribe… I think payoff is a great word for it.”

He continues:

What’s happening is third-tier VCs are trying to get deals away from Sequoia and KP and offering entrepreneurs some cash as part of the deal. I firmly believe that all the cash going into a company belongs in the company. I don’t want entrepreneurs to be bought off. All the money raised belongs in the company, so the entrepreneur can hire more people and build the company faster, and test out their idea. The entrepreneur taking a million bucks out of the company that should have stayed in the company says the company doesn’t have as much a potential for success.

Elsewhere, he says “entrepreneurs are in charge of the dining room table.” See video above (RSS readers will have to go to site).

While many may support Conway’s point of view, there are many entrepreneurs who vehemently disagree. They’ll argue that giving entrepreneurs cash in a financing gives them enough financial security to focus on the long-term — and thus willing to swing for the fences. Instead of yearning for pay-back for their work, and taking the first offer for an acquisition, they’ll be more likely to want to think really big. There are plenty of examples of this, the main one being Facebook. It is well known the founders took money out of the financing round, and that is arguably one reason why Mark Zuckerberg has pushed aside billion dollar offers, and stubbornly sought the big time. Facebook’s Sean Parker has since become a major proponent of this, helping push it at his VC firm, The Founders Fund.

Update: Another reason this is eye-opening is that Conway is an advisor to Facebook.

Update II: We should note that Parker’s cash-out plan may be intended for companies that are more mature, whereas Conway’s criticism of the cash-out practice (again see video) focuses on seed and first rounds. Now, Parker’s FF class plan technically can be implemented at the first institutional round (many companies are already quite mature by that stage). We’d argue, though, that each entrepreneur has different needs, and VCs should assess each company on a case-by-case basis.

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Serial entrepreneur Sean Parker’s new philanthropy focused company, Project Agape, launches tonight, with a special version of its software tailored for Facebook users.

It is called Causes on Facebook.

Just as significant as its launch, however, is its intent to showcase the strengths of Facebook’s new “Platform,” a set of tools to allow developers to build applications upon Facebook. More on that in a second.

Project Agape is the most ambitious social network we’ve seen that lets people mobilize around causes of their choice. It has been secretive until now, providing a sneak preview to a handful of people, including VentureBeat (see coverage). Even today, its release for Facebook’s platform is a limited one. A more extensive version will be released next month.

A competitor, Change.org, launched just two days ago (see our coverage). That network focuses on political change. Its service tries to tap users to choose slates of politicians and other recommendations to effect change. But that site is bare bones, and still has relatively few users.

While Agape too is new, its advantage is formidable. Its software is by far the most integrated of any third-party company into the Facebook platform. Any of Facebook’s more than 24 million users can select Agape from a menu, and with one-click install it on their Facebook toolbar for continuous use. See early screenshots at bottom.

Here’s how it works:

Called “Causes on Facebook,” it allows you to create a cause, or promote an existing one to their friends You can pick from 1.5 million non-profits in the U.S. It uses Facebook’s “feed” feature to notify friends when you’ve joined a new cause. Finally, it allows you to promote the cause in other ways, building up points through a reward system, letting you show off virtual trophies that you win on your profile page after say, donating money. Ultimately, it wants to make it easier to raise money for causes. It launches with formal partnerships with ten non-profits.

It plans to use Facebook’s “social graph,” or the network of relationships users have with their friends, and their friends’ friends. The point is to mirror real life, where activists and other fund-raisers reach out to influencers and ask them to reach out to their own followers. (We wrote about this in our first post). Facbook Photos and Facebook Events have done well by building on this. “Cesar Chavez would ask a farmer to gather their friends in their hut, and he would talk to them,” explains Joe Green who co-founded Agape with Parker.

The two go further, arguing that young people have become alienated from political and social causes precisely because there has been no way to mobilize online. They point to an “erosion of social capital” caused by modern lifestyles. A decline in local chapter-style organizations has left a void, they say.

Parker’s convinced this will work because Facebook’s users exhibit a higher level of engagement than most sites. About 50 percent visit the site daily, with an average use-time of more than a hour.

One advantage Agape has is how it sits on top of Facebook’s platform. New internet companies find it hard to attract users from scratch. Most try a “sucking” strategy. Photo, video and other companies, for example, let users place so-called widgets on sites like MySpace, and by trying to suck those users back to their own sites with links, registrations and so on. Agape’s method is different because it seeks to remain native to Facebook, with style and features that make it look like just another Facebook application. It uses Facebook’s mark-up language, “FBML.” Its icon is similar to that of Facebook Photos and Groups.

The close partnership stems from Parker’s relationship with Mark Zuckerberg, chief executive of Facebook. Parker was an early collaborator at Facebook, before leaving the company more than a year ago. Green, meanwhile, was Zuckerberg’s roommate at Harvard.

“Causes on Facebook,” is just one of 80 applications built by 65 companies on Platform. Zuckerberg announced more details about the platform just now during his keynote address. He emphasized that Facebook will encourage companies to make money from advertising and other transactions, giving them free access to the “canvas” pages of their applications to do as they please. This contrasts with the more closed nature of other networks, such as MySpace, which notoriously shut down access to Photobucket when that company tried to promote sponsorships. Zuckerberg also called on to the stage representatives from Microsoft, Amazon and Slide to announce integration partnerships.

Update: One attendee, I think it was Saar Gur from Charles River Ventures, went so far as to say this might represent the “end of Web 2.0.” Most new consumer Internet companies will feel forced to launch from within Facebook, because of its huge base of young, interested, experiment-happy users. If you can’t succeed there, can you hope to do so outside? So Facebook becomes the platform. Provocative thought, and clearly an overstatement, but it stayed with me.

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Project Agape, as we mentioned earlier, is a site that wants to empower people to further their political or social cause using the Internet.

The site remains secretive for now, but we spent some time with co-founders Sean Parker and Joe Green last week, and got a sneak peak at what they are doing, including a demonstration of their site. We came away impressed. This site is likely to have significant impact on philanthropic causes. We’d recommend any non-profit, or even for-profits working on good social causes, to get in touch with this company. You could call Agape a “meta” non-profit.

To piece things together, Project Agape is the new name of Philotic, a company we’d mentioned in January, when it got funding from the Founders Fund in January. Parker and Green confirmed they raised $2.35 million from that firm. Parker, 27, who is a partner at Founders Fund, is also a co-founder of the company. This puts Parker in the highly unusual position of investor and investee, but then Parker is an unconventional guy (as mentioned before). Philotic, in turn, was the evolution of an older company, called Essembly.com, which was founded by Green. That company was restructured into Philotic when Parker and the Founders Fund invested earlier this year. The Essembly.com site is still active.

Here’s the history: Green (pictured left), 23, a roommate of Facebook founder Mark Zuckerberg’s at Harvard, almost became a co-founder of Facebook. However, he’d gotten in enough trouble with Zuckerberg, when they launched facemash.com, a site that popped up two student photos and asked people to choose who was more attractive (see our early story on Facebook, which recounts the history). Zuck was put on probation, and Green got a slap on the wrist and was let off. In 2004, instead of joining Facebook, Green decided to join the presidential campaign of Sen. John Kerry. Green, self-deprecatingly, notes that not only did he lose the states of Arizona and Nevada for Kerry, but also a Facebook stake worth in the many millions of dollars.

But Green, whose eyes this past Friday evening were bloodshot from overwork, is following his passion: Giving people a way to get their voice heard, at a time when political alienation and disengagement are greater than ever. Citizens perceive politics as dominated by money. Philanthropies and political parties court the older and wealthy, because they have the dollars; the average person is left with no medium to participate.

Green wants to change that. In 2003, he tried to convince Zuckerberg, his computer science roommate, to build a social network dedicated to empowering people in the political process. Zuck wasn’t interested in politics at the time. So after the Kerry stint, Green started Essembly.com. He built it over the summer of 2005, with six engineers. There, he experimented online with basic precepts of political mobilization: You start out with minimal commitments, getting people to answer questions. The more people give of themselves, the more you reward them, and the more you reward them, the more they get involved.

In short, Green dreamt of creating something akin to the townhall of the Internet, a democratic ideal where people’s voices are hard — and a goal talked about for years by early Internet visionaries, like John Perry Barlow — who hoped the Internet would be a transformative force for the good. But the Internet of political motivation remained elusive. Organizations like MoveOn.org exist, but they remain relatively small compared to the scale of a Yahoo or even a Facebook.

Last year, Green was in his hometown of LA, and hooked up with Sean Parker (pictured left), who’d left Facebook, and was spending time in LA before joining The Founders Fund as a venture capitalist. They hit it off, and started talking about Green’s vision. It resonated with Parker, who’d been thinking about viral causes since his days at Plaxo, and more recently, about online democracy. Parker returned to SF to work for The Founders Fund, and convinced Green to come to Berkeley. Parker went to work to help transform Essembly into a new company that could be invested in by his firm. He and the firm restructured Essembly, buying out its old shareholders, and placating them by giving them a small share in the company (Parker had learned this art the hard way — after helping Zuck do something similar with Facebook, but Facebook had been dogged by a lawsuit for years afterward). They kept two of the original engineers, and brought in two others to the new Berkeley company.

One of their goals: To change the model of fund-raising, to make it more efficient. Many charitable organizations absorb 20 to 30 percent of their received donations in overhead expenses. Online fund-raising can be more efficient. Yet only $5 billion of donations are online, even if it is growing quickly. Some $260 billion is given to charities each year, and 75 percent of that is from individuals. Most of what we speculated two weeks ago about Project Agape was accurate, though we’d say Project Agape is more Facebook, less Friendster.

Green is founding president of Agape, and Parker is chairman. They are co-CEOs. Green hangs out mostly in Berkeley, and Parker spends about a third of his time at the office, the rest of it traveling.

Finally, a note on the origin of the word Philotic: It comes from the Philotic Web, a metaphysical construct of the Ender’s Game series of works by science fiction author Orson Scott Card. In that work, kids who think they are playing a game find out that they are really being used to fight a major war. Only the kids have a chance of winning, because they’re the ones who can take the risks necessary to win the war. With two twenty-somethings attempting to revolutionize the world of giving with Project Agape, these Philotic Web references are more than apt.

Entrepreneur Sean Parker’s latest undertaking is Project Agape, a secretive start-up working to empower people to further their political or social cause using the Internet.

Parker, 27, isn’t sharing much publicly about the company yet, but it’s worth noting because Parker tends to make waves when he gets serious about something.

There was controversial music-sharing site Napster, where he was co-founder; the contact updating service, Plaxo, where he was also co-founder, and which rubbed lots of people the wrong way until it mellowed recently; and Facebook, where he joined up with Mark Zuckerberg early on and saw it emerge into one of the biggest social networking companies of the day. He’s also been articulate about start-up financing models.

Om Malik first found out about Project Agape a few weeks ago. VentureBeat spoke with Parker, but he’s committed to secrecy for now. The Founders Fund, the venture capital firm Parker recently joined as partner, has invested in the Berkeley, Ca. based Project Agape. Parker hasn’t left the firm, but has poured most of his time into the new venture. We’ll update when he has more to say. But here is some context, and some clues.

Notable is that Parker joined the VC world because he was exhausted with start-ups, he told us during an interview three months ago. At that time, we could tell Parker was getting impassioned about viral communication — so we’re not surprised at his quick embarking into the start-up world again. Here’s a snippet from that previous piece:

Parker also came up with much of what we see as the Facebook News Feed, and he believes that format is the future of communication on the Web. “The social graph,” he says, referring to the connection people have with others through multiple degrees, “is the critical ingredient.”

In other words, Project Agape is likely to use your extended personal network, first popularized by Friendster, to let you further your cause. (Parker was close friends with Friendster founder Jonathan Abrams.) Now, you join that with Facebook’s “newsfeed” feature, which updates you with the activities of your friends, and Project Agape may have something interesting. It’s difficult to see how this could be extended beyond social and political activism, because people wouldn’t respond very well to businesses using this sort of thing. But the number of page views created for advertising could be significant, either way.

So far, we’re just speculating, but more hints come from Michael Arrington, who has just published something based on an interview with Parker:

New sites like Change.org and dotherightthing and Six Degrees help people talk about issues online, but they don’t go far enough in using virality to get new users and get them actually doing things. Parker wants the kind of activity around these organizations that Facebook sees - tens of thousands of new daily users and hours and hours of social interactions. The result, he says, will be a much more efficient engine for organizations to get volunteers and raise money.

(Updated with more details on how FF works)

A form venture capital funding in Silicon Valley is getting increased interest from founders of start-ups.

It is called the “FF class” of stock, for founders who want to cash out a small percentage of their stake in a company so they don’t have to wait until the company is sold or goes public.

This practice is not entirely new. Many founders through the decades, including at Intuit years ago and Jonathan Abrams at Friendster more recently, have sold shares in their company to their venture backers and gotten cash to enjoy life a little more. But with the favorable start-up climate now, VCs are doing more to accommodate founders, entrepreneurs are getting more sophisticated, hearing more about these sorts of terms, and increasingly asking for them.

The practice is mentioned in the SF Chronicle story by Jessica Guynn, about the Sean Parker of the Founders Fund (the fund’s partners pictured above) and his decision to devise such a stock for Barney Pell, founder of young search start-up Powerset:

Inspired by his personal frustrations as a startup founder, Parker came up with a novel arrangement that he hopes will benefit other founders as they build their companies: a new type of stock that allows founders to cash out a small percentage of their stake in a funding round so they don’t have to wait until the company is sold or goes public.

Pell, who maxed out credit cards, deferred salary and considered taking out a second mortgage until he could raise serious money and interest from the right investors, says he’s relieved that he and his fellow founders don’t have to feel rushed to sell the company to get some return on their investment of energy, time and money.

This Powerset iteration was put together by attorney Steve Venuto, of Orrick, and VentureBeat has been told that Fenwick & West and Wilson Sonsini have also given thumbs up to the practice. Venuto was also the lawyer of Facebook, another company backed by the Founders Fund’s Peter Thiel. (Someone told us Venuto also the only lawyer in the valley who can code, but we haven’t confirmed that.)

The amount of the cash-out is capped to between 10 and 15 percent, depending on the round. It should also be used with caution, because it means you get less as a founder when the company does get sold or go public. There’s a story we’ve heard about the founder of Viaweb, a Paul Graham company, who cashed out in order to buy his wife a Saturn car. It became known later as the “million-dollar-Saturn,” because of the worth that stock would have been had he kept it.

Thestock also lets the investors cash out too, allowing venture capitalists take some money out of the company during a subsequent higher-value round.

The stock type is also significant because a new law, 409A, forces companies to grant options at their fair market price. This brought more scrutiny on the cash-out process. We ran this by Gordy Davidson, of Fenwick & West, who explained the challenge as follows. If a VC buys shares from a founder for $1 each, to let the founder cash out, this effectively establishes a fair market price for the shares. All option grants going forward must thus be granted at $1. This may not be good, because companies may have been able to grant options to employees at 10 cents had no such price been set (this lower price is desirable, because it gives greater upside). The trick is to turn the founders stock into “preferred” shares, which can get around that problem. That, in turn, has some tax implications, but of course — with good lawyers — there are even ways around that.

So here’s how Parker and Venuto structured the FF class (Parker and Thiel named it “FF’ and the name stuck): The FF has a single preference clause that distinguishes it from all other stock. It is convertible to any future class of stock, when certain conditions are true. For example, the holder of FF can convert it into say, a Series B class of stock and sell it to investors, at which point it takes on all the rights and preferences of Series B stock. But it can only be done during the new issuance of that Series B, and only when that Series B is sold to investors; you can’t convert randomly.

Parker tells VentureBeat he spent nine months thinking about how to align founders’ interests more closely with venture capitalists, and this is what he came up with. The stock was first used at Powerset, and has since been used at a secretive companies Philotic in Berkeley, and David Sack’s Geni (no web sites).

[Pictured above is Ken Howery (left), Peter Thiel (middle) and Sean Parker (right). Photo by Chron's Katy Raddatz]

The Founders Fund, the venture firm led by former PayPal chief executive Peter Thiel, has hired Sean Parker, the controversial entrepreneur, who has just turned 27, as a managing partner.

Parker somehow attracts attention wherever he goes. He has already launched three well-known companies. At 19, he co-founded Napster, and his cheekiness drew anger from the recording labels, which eventually shut down Napster with lawsuits. Parker told VentureBeat last week, in an interview, that his time at Napster was his biggest lesson — about who to hire to run companies and who to take money from. “I wasn’t sophisticated enough, I didn’t know any better.” But Parker’s past still has some investors in Thiel’s fund nervous. Thiel responds: “Sean has rubbed a lot of people the wrong way, in part because he’s been so successful.”

One person he rubbed is the big-gun himself, Michael Moritz of Sequoia — an early backer of Yahoo, Google and YouTube. After Napster, Parker co-founded Plaxo, a site that updates contacts. Soon, Parker was in peoples’ faces again. Some accused Plaxo of spamming, because of its constant update requests. During the post-bubble downturn, Parker got pushed out by Sequoia Capital and Ram Shriram, and there’s been silence over the real reasons ever since. There were reports of private investigators going after Parker. And things weren’t improved, Thiel says, when Parker wouldn’t let Sequoia invest in his next company, Facebook. “Sequoia had no chance to invest,” Thiel explains, “because of the way they mistreated him at Plaxo. He’s been treated worse than he deserved.” VentureBeat has contacted Sequoia for comment.

Without Parker, Plaxo has become more diplomatic — but almost too much. You never hear about it anymore.

Parker soon met Mark Zuckerberg in New York, after the young “Zuck,” as he is known, had launched Facebook. Parker helped Zuckerberg learn the ropes. He helped him raise money at great valuations — ticking off several VCs who’d wanted in on the deal. They first raised seed money from the Founders Funds’ Thiel, who Parker had met through Sequoia’s Michael Moritz — an irony. Facebook raised only $500,000, and it was profitable immediately. Facebook’s traffic rocketed, and the company went in red again after taking more venture capital from Accel Partners to expand.

While Zuckerberg has been widely acknowledged as Facebook’s leader, even by Parker himself, there’s little question Parker helped Zuck keep control and ownership. Zuck loves coding, so with Parker’s business sense the two were a great pair. Parker helped bring in Owen Van Natta as COO. Parker was one of four board members at Facebook (along with Zuck, Thiel and Accel’s Bryer). He hired former Napster employee Aaron Sittig to redesign the site as we know it. Parker obsessively negotiated with the owner of facebook.com to buy the domain. Parker also came up with much of what we see as the Facebook News Feed, and he believes that format is the future of communication on the Web. “The social graph,” he says, referring to the connection people have with others through multiple degrees, “is the critical ingredient.”

[Side note: See this link here for other details. It was written by Numair Faraz, a friend of Parker's who said Parker had tacitly agreed to the post. Numair forwarded it to us a couple of weeks ago. At the time, we ran Numair's blog post by Facebook's spokeswoman, who reviewed it, and declined comment. When we ran the facts by Parker, he clarified the following: Plaxo had two other co-founders, Tipping Point was not an inspiration for either Plaxo or Facebook, he met Facebook's Zuckerberg met in NYC and Zuckerberg had every intention of turning the site into a business; Parker just accelerated the process, he clarified. Finally, regarding Numair's comparison on Parker with Jim Clark (pictured above), the same comparison was made by Peter Thiel. In an interview, Thiel said Parker reminded him of Clark, who also founded three high-profile companies (SGI, Netscape, WebMD) but that Parker was twenty years younger: "He's just getting started," Thiel said. "The time horizon is really long."]

Parker’s self-acknowledged insecurity is what drives him to be edgy, but also to excel: “I’m still super insecure,” he said. Parker feels it in talks he’s having with entrepreneurs on behalf of the Founders Fund, he says: “I always feel like the underdog. I walk away from meetings asking myself ‘Did I add any value, or are they going to tell other people that shouldn’t talk with us?’”

Like many people at Facebook with ambition, Parker left Facebook quite early in the game. Facebook is firmly in Zuck’s grip, along with a few trusted “family” members, as his close-knit circle is referred to. Parker retains a sizeable chunk of Facebook shares. Others have left, impatient because Zuck won’t sell the company or give them more responsibility.

Parker says his three start-ups have also exhausted him, another reason for him to try out VC: There was “a lot of stress, a lot of conflict,” he said.

He said he joined Thiel because of Thiel’s maverick ways. Thiel is not a classic VC; he runs the firm with an entrepreneur’s bent, from his Clarium Capital hedge fund offices — swanky, we add, nicely perched atop the hills of the Presidio. Parker says too many VC firms are run by people who never launched and ran their own companies. At Founders Fund, Thiel is focused on investing in early-stage companies, and he’s given Parker a carte blanche to find the best companies he can, Thiel says. Founders Fund is investing a $50 million fund, and it is about to launch a second, larger fund.