Liam Dann: Thiel\'s $15m tip worth following

Top man that Peter Thiel. Actually, we do not know do not know that much in regards to the guy.

He's the Facebook billionaire, co-founding father of PayPal, a large tech investor with some pretty strong political opinions. He's a libertarian - a backer of long-shot Republican presidential candidate Ron Paul, although his cultural and social views are more progressive than those you'd hear in any Republican candidate debate.

He's also a Lord of the Rings fan who has fallen in love with New Zealand.

Whatever you are making of all that, he ought to be applauded for his generous commitment to the local tech industry.

He has helped create a $40 million investment fund for brand new Zealand so as to provide a vital kick-start for the type of companies that the rustic must put money into whether it is to seriously change its economic performance.

The Government has stumped up $20 million for the fund. This one bloke from the united states is nearly matching that with $15 million.

The rest will come from other private investors.

We must always be embarrassed by that sort of generosity relative to the Crown's miserly effort. But hey - we'll take it.

Thiel is worth (in accordance with Forbes) almost $2 billion. So $15 million isn't enormous money to him. In comparison to the common Joe who might need a number of hundred grand of equity of their house and retirement fund, Thiel is rather wealthy indeed.

In reality, on that kind ratio he can afford to spend $5000 the style our average Joe spends a dollar.

But keep going with that maths and also you find it makes Thiel's investment corresponding to our average Joe stumping up $3000. Not a mere sum for many folks.

How often do you walk past the man collecting for kids' cancer and pa $3000 inside the bag?

Needless to say Thiel may be hoping that cash represents an investment instead of charity.

But if you study the track record for brand new Zealand tech company success you'd ought to say there's a component of philanthropy to it.

Many clever Kiwi tech companies have made it during the start-up phase but never pushed directly to make anything like an inexpensive return on investment.

Even our shining lights Xero and Lanzatech remain speculative and unprofitable when viewed from the point of view of a sensibly balanced investment fund.

Venture capital works in a Darwinian way. It takes many hundreds of failures to seek out the only or two evolutionary successes.

So it's safe to assert Thiel has invested with the information that he may never see a financial return.

He might strike a wonder company and double his wealth or he might lose the lot. More typically he might take 10 years to work out a return equal to putting his money inside the bank. It's a tough game as many New Zealand investors have found through the years.

However it is a game Thiel knows well having been involved with two of the IT sector's biggest successes - PayPal and Facebook.

It really is both flattering and comforting that an interloper with that sort of track record ought to be so enthused about New Zealand's future.

It's always the case that wealthy outsiders are more upbeat than we're in regards to the nation.

Actor Stephen Fry is currently enamoured with us.

Another net guru, Kim Dotcom, also fell for our "South Seas Island meets Seattle" charm.

Director James Cameron is moving here and another US billionaire Julian Robertson owns luxury lodges here and has donated a substantial art collection to the Auckland Gallery.

There's more to Thiel's generosity than simply cash.

His expertise and networks will add enormous value to the local companies lucky enough to get entangled with the fund.

His real gift is his energy and exuberance for the concept that New Zealand can be an incubator for world-changing technology.

The assumption of remodeling the economy by putting in place a hot house of tech innovation just isn't new.

It's been around as a minimum for the reason that "Knowledge Wave" years of Helen Clark's first-term Government.

Sadly, despite all of the talk from politicians we're yet to determine any Government make the type of financial commitment required.

In Thiel we appear to have found a champion. His investment alone may not be enough.

But his involvement and the instance he has set provides cause for hope.

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