Jack Selby, a former PayPal exec and the longtime managing director of Thiel Capital who attracted some consideration years again for his low-key largesse, has a brand new, $110 million enterprise fund that he intends to take a position principally in his adopted state of Arizona, the place Selby has lived since 2002.
The debut automobile of the agency, referred to as AZ-VC, is backed by numerous real-estate outfits in Arizona, together with a significant native utility firm. Notably, nonetheless, Thiel will not be an investor and neither are any of Thiel Capital’s many institutional backers.
We talked earlier at present with Selby — who was calling from the Milken Institute summit in Abu Dhabi and planning to attend the final Formula One race of the season afterward — to study extra about why that’s.
We additionally talked with Selby about his relationship with Thiel and whether or not, like a rising variety of folks in Thiel’s universe, Selby plans to leap into regional politics sooner or later, utilizing this fund as a jumping-off level. Our dialog has been edited for size and readability.
TC: You’ve been operating Peter Thiel’s household workplace for years, which is in California, however you might be in Arizona. How did that occur?
JS: My father labored for a “MadMen” period promoting agency referred to as J. Walter Thompson, in a job the place you both bought fired or promoted each three or 4 years. My dad [experienced] a little bit of each, so we had this nearly military brat-type upbringing, shifting seven instances throughout my childhood. Throughout my senior 12 months, I refused to maneuver [from our then-home] in suburban Detroit and stayed with a pal and his household till commencement, however my dad moved to Phoenix; my youthful brother grew up in Phoenix. And going within the summers in between school, I actually sort of fell in love with the place.
Later, I used to be a part of the group that began PayPal [as a VP nearly straight out of college] and after we bought the enterprise to eBay in 2002, I knew I wished to get away from the onerous tax regime of California. Arizona was sort of the plain selection, so I moved in 2002, and I’ve been a cheerful resident for lots of years.
Do you spend a lot time in West Hollywood, the place Thiel Capital is now based mostly?
I pop forwards and backwards between Arizona and California very often. That’s one of many appeals of Arizona. Opposite to the entire narrative that’s been constructed up round Austin and positively Miami, proximity to California issues. If you will get forwards and backwards to California in an hour or so by aircraft, that’s very handy, whereas it’s a four-hour flight from Austin. It’s one of many big benefits I feel now we have in Arizona.
It does seem to be lots of people have headed from California to Scottsdale specifically. Are totally different cities in Arizona recognized for various industries?
Loads of the massive protection contractors like Lockheed Martin have a presence in Arizona. Loads of the chip corporations have a presence in Arizona. Phoenix is the fifth [most-populous] metropolis in the USA, which numerous people don’t know, so you’ve gotten pockets of exercise all through better Phoenix, starting from Glendale, which is within the far northwest nook, and all factors in between. One of the best analogy I may give you is Los Angeles, however simply, say, 50 years earlier.
You’ve receiving backing to your fund from Arizona’s actual property business, and your anchor investor is a utility firm that dedicated to take a position $25 million within the fund. Why would a utility firm do that?
I don’t imply this to go with myself, however it was a two-year-long courting course of to get them throughout the end line. With my day job with Peter, and I say this very humbly, however I principally know each LP that allocates enterprise capital on the planet, whether or not they’re right here in Abu Dhabi or Tokyo or New York or wherever it’s. All of them know who we’re, and they might like to curry favor with him by giving cash to some new fund that’s linked to Peter’s universe. However I wished to make use of the fund as a litmus take a look at to see if the Arizona group wished to see one thing like this fund stand up and get off the bottom. Actually, I didn’t know what the consequence was going to be, however I used to be very heartened by the truth that folks raised their hand and put us in enterprise.
Two issues. First, I’m nonetheless not understanding why a utility firm is a pure match right here.
Arizona has been very, very actual property oriented, and in case you look again throughout varied housing cycles, Arizona has been the poster little one for the increase and bust as a result of we don’t have a lot diversification when it comes to business. The pondering from a utility perspective is [anything that] helps diversify the economic system and helps construct up the expertise sector inside Arizona [is a positive] that can assist easy out a few of these ups and downs.
And also you expressly didn’t need or ask for capital from Peter or Thiel Capital’s LPs. Why?
My day job with Peter is defending the nest, so to talk, and the nest is essential. Peter is my golden goose. I’ve been working with him longer than anybody else. He’s a really shut pal. He’s a really loyal particular person. As you may think, we get barraged with unsolicited inquiries on the lookout for his backing all day lengthy. So certain, I might have gotten [their collective backing] however I didn’t go to a sovereign wealth fund in Abu Dhabi or go to Peter as a result of they haven’t any connection or ties to Arizona and I would like folks to be concerned. I would like folks to be advisors. I would like them to be deal scouts. I would like them to be mentors. And the Abu Dhabi sovereign wealth fund will not be going to do this.
Enjoying satan’s advocate right here, what in case you strike gold in Arizona? Will that be an issue for Thiel Capital’s buyers?
If we get to the purpose the place Peter is sniffing round and wanting to take a look at a deal [in AZ-VC’s portfolio], then that’s mission completed. I’ll gladly determine that conundrum.
Clearly, a rising variety of folks in Peter’s world are operating for public workplace. May this fund be a sort of precursor to a potential political marketing campaign sooner or later?
No, I don’t have any curiosity in politics. I’m solely within the sense that I wish to see our political setting be as center and down the golf green and regular because it presumably will be. I don’t wish to see one other Sheriff Joe come about as a result of Sheriff Joe is unhealthy for enterprise.
Concerning your relationship with Peter, you’ve labored with him since 1999, however just about everybody I’ve recognized who works for him has labored for him since almost the outset of their profession, typically over a long time. What’s it about him and the tradition round him that retains folks round for therefore lengthy?
He prizes loyalty and he’s himself simply an especially loyal particular person, and I feel he’s been so mischaracterized within the media. Clearly, I’m biased, however it drives me loopy. He’s a really regular man. He’s very rational. He’s clearly very sensible. And I’ve an enormous quantity of respect for him.
I’ll by no means voluntarily go away the orbit of Peter Thiel. It’s a reasonably superb seat to have.