7 ms·

Billionaire Peter Thiel makes fortune after sweetheart deal with [NZ] government

60 points by lancewiggs 10y ago

trome 10y ago
Is this terribly surprising? Public/Private partnerships usually do not pan out unless you have competent administrators ready to fight for the best deal on your orgs behalf. I do wish we could eject people who actively want to destroy America from the country, but rather we seem to have endless tolerance for Peter Thiel (German) and Milo Yiannopoulos (British) to come here and spread hate speech, plot ways to recreate slavery, etc.
- deanpeterson 10y ago
  Talk about an echo chamber of left wing fascists. Do you left wing nut jobs even have any clue what conservatives like Thiel stand for or do you just knee jerk to "ban em, ban em all"? I mean after calling them names of course.
- joezydeco 10y ago
  If we can't eject them we should, at minimum, not give them roles in our government.
- api 10y ago
  Peter is much more complex but Milo is pretty transparently a professional troll. I'm sure he's overjoyed to get crazy protests at Berkeley and to get banned from Twitter. The more attention he gets the better it is for his brand. He intentionally picks targets that are the most likely to over-react and uses the most inflammatory language he can. I mean this has to be the trolliest trollmobile that has ever trolled: http://media.breitbart.com/media/2016/09/img_4893_1024-640x480.jpg http://media.breitbart.com/media/2016/09/img_4893_1024-640x4... People need to learn to not feed the troll. The worst possible thing you can do to Milo is ignore him.
  - Florin_Andrei 10y ago
    > Peter is much more complex but Milo is pretty transparently a professional troll. Peter is a slice of bread with honey on one side and some sort of putrid matter on the other. Milo does not have the honey-tinged side.
    - anigbrowl 10y ago
      I think he's a bit more complex than that and we should avoid overly simplistic metaphors. I am not a fan of Thiel but I have listened to him explain his worldview at length in person and while I dispute many of his assumptions I feel he holds them in good faith and is persuadable. Milo, on the other hand, acts as if he aspires to be the Ernst Roehm of the internet age and I have little tolerance for him.
      - Florin_Andrei 10y ago
        When things go from bad to worse, the time for complexity is gone.
        anigbrowl 10y ago
        Agreed. I just didn't form the impression that he was actively malicious so much as callously indifferent.
        Florin_Andrei 10y ago
        > callously indifferent I actually agree on that one. But he has tremendous amounts of money and power. In the current small, interdependent world, callous indifference can do a heck of a lot of damage.
  - metaphorm 10y ago
    Thiel is possibly an actual vampire, or at least aspires to be one.
- kevinpet 10y ago
  Destroy America by advocating for diminishing the scope of the first amendment?
  - anigbrowl 10y ago
    Nobody has diminished the scope of the first amendment, which has never been unlimited and whose exercise Milo Yiannopoulos and his affiliates actively seek to limit for others.
    - happyrock 10y ago
      > whose exercise Milo Yiannopoulos and his affiliates actively seek to limit for others. How so?
      - anigbrowl 10y ago
        I'm really tired of re-explaining this (not necessarily on HN) so I ask you to forgive me for stating it very briefly. Also, I'm not going to defend this particular content below from disagreement because I'm tired - some other day I'd be happy to. In a nutshell, Milo argues that queers should go back in the closet, women should get back in the kitchen, and colored people should go back where they came from. He consistently delegitimizes and intimidates people he dislikes (which seems to be most of them), thereby creating a 'chilling effect' that dissuades them from exercising their own rights - 'chilling effect' is a legal term of art that's worth looking up if you're not familiar. Moving on to the affiliates, by which I mean those who identify with him or subscribe to his views, my argument is simpler: some of his supporters shoot people. Just over a week ago a protester against his appearance at the University of Washington was critically shot in the stomach. The shooter turned himself in to police, claiming that he thought he was being attacked by a white supremacist, but a review of his Facebook revealed him to be a right-winger who had messaged Milo to request an autographed hat an hour before the shooting. He's still walking free AFAIK. Likewise I'd point to the deaths of 6 people at the hands of a gunman in a mosque in Quebec city last week, and to the deaths of 9 people in Charleston last summer at the hands of a right-winger whose avowed intention (restated at trial) was to provoke a race war. I could go on an on. Violent protest by anti-fascist groups and the like should always be questioned and examined, given the variety of motivations claimed - I don't lose much sleep when I see property damage take place, but that's cause it's not my property or business. It's not a form of discourse* that should be resorted to lightly or enthusiastically - we have sports for people who just need to blow off steam. However, where there is abundant evidence of violence being systematically deployed against persons - even if it's on a distributed ad-hoc basis rather than the product of a hierarchical command structure then I absolutely believe that it's appropriate to employ it in return in defense of self or others. I reject the argument that some people make that people are never allowed to act violently until they've already suffered an injury (at which time it might well be too late to adequately defend oneself), Where a credible fear of violence exists, so does a right to defend against it. From a American legal standpoint, you might want to look into the concepts of 'fighting words' and the technical definitions of assault. If I brandish a hammer and say I'm gonna get you, happyrock!' you're generally not obliged to wait for me to actually hit you with the hammer before punching me in the nose. Obviously I'm treating several complex subjects very superficially in a short internet comment, but I hope you can agree that these are things I've thought carefully about rather than just expressing a momentary emotional outburst. * No doubt someone will say that violence is antithetical to discourse, but I agree with Clausewitz that 'war is the continuation of politics by other means.'
- edblarney 10y ago
  "Public/Private partnerships usually do not pan out unless you have competent administrators ready to fight for the best deal on your orgs behalf." No - they fail 95% of the time because government administrators have no clue how to be running VC investment vehicles in the first place, which is why they have to hire people like Thiel. I don't think it turned out so badly. 'Bad' would have meant all the companies went bust. A public/private 'investment vehicle' that actually funds successful startups is a huge win - because it's rare. Not to be too defensive of Thiel - but one could argue that it was Thiel's participation that made the fund successful. Most of these government VC things fail badly, and it's one of the things that is way, way out of their competency. It's possible that the structure of the org could have been done a little bit better, but then possibly it would have been hard to attract someone like him. The governments goal was more along the lines of trying to spur entrepreneurial activity - they got that + a little bit of profit. That they didn't get more is not a bad thing. In the vast majority of cases - they would have failed to spur activity - and lost a pile of money. So, the situation should be characterized as a 'win' just not as good as people would have liked.
  - vorg 10y ago
    > The governments goal was more along the lines of trying to spur entrepreneurial activity - they got that Virtually all the fund's investment went into one company (Xero). If Thiel had already decided to invest in that company anyway (a plausible scenario), then his deal with the NZ govt is equivalent to receiving a free call option (if I remember my Options Theory correctly). And no entrepreneurial activity would have been spurred.
    - edblarney 10y ago
      I'm not making the case that Thiel's involvement may have been marginal - rather, simply that it could have been material. But more so the general case: Governments do some things well - but not VC. And that if it requires collaboration with more aggressive VC's to spurn activity, well, then that's not so bad because it's very hard to do.
- cylinder 10y ago
  Interesting thing here is that is an example of why privatisation is bad (the people get scammed), but at the same time an example of government's administrative incompetence (which can be an argument for privatisation). Personally, I'm tired of all this neoliberal bullshit and would rather just figure out a way to make our public institutions run extremely well.
- deleted 10y ago
  [deleted]
- messick 10y ago
  I think Peter can be kind of an asshole in some areas, but for all his faults, he isn't even in the same asshole universe as Milo.
ag56 10y ago
Isn't this kind of the point? The NZ governments goal was to increase private investment, not make a return. They succeeded -- Thiel put $6.8m to work in NZ that he may not have otherwise. Many countries do this. For example in the UK the British Business Bank will become an LP in a VC fund acting as a multiplier on capital raised. You may not agree with the government's decision, but you can hardly blame Thiel for making use of it.
- kiwidrew 10y ago
  Thiel put the vast majority of this money towards buying Xero shares on the public sharemarket. Hard to call that a bold investment strategy. As if that wasn't low-risk enough, he then managed to buy these shares on 50% margin (that's the NZVIF portion) and double his potential profit AT NO ADDITIONAL RISK.
  - boznz 10y ago
    Agree, Nobody likes to see their government whoring out citizenship's (there's no other word for it!) but if they do they they should be be honest and sell the passport for cold hard cash to use in infrastructure or social projects, NOT for investing in real estate (which fucks up the local market) nor stock market investments where there is more chance of actually gaining money in the deal.
angry_napkin 10y ago
It appears that was the point. It's not like he sailed in and viciously took advantage of everyone. I suspect this is on HN for a very specific reason.
deanpeterson 10y ago
Funny how my comment was flagged and banned: Talk about an echo chamber of left wing fascists. Do you left wing nut jobs even have any clue what conservatives like Thiel stand for or do you just knee jerk to "ban em, ban em all"? I mean after calling them names of course.
- sctb 10y ago
  Users flagged that comment for being uncivil and unsubstantive, as in, against the guidelines of this site. Not only have you continued to comment uncivilly, but most of the comments from the account have been this way. We didn't yet ban the account before, but we've done so now.
  - superduper36 10y ago
    Wow, the bar for "uncivil" seems to be really low only for conservative posters on HN.
    - sctb 10y ago
      Any reasonable bar for incivility must surely catch the kind of name calling present in your comments (and specifically mentioned in the site guidelines), not to mention reposting it once flagged by the community. There are civil and uncivil posts on both sides of most issues on HN, including this one. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - boznz 10y ago
    why is there no link to flagged comments so we can make up our own opinion (were all grown-ups here!)
    - grzm 10y ago
      If you want to read killed comments, set showdead on in your profile.
kiwidrew 10y ago
Personally, I think that the part of this deal that stinks is that the Valar/NZVIF partnership only invested in TWO companies; the majority of funds were just used to buy Xero shares on the public market (yes, they were already listed on the NZX sharemarket by this point). That's kind of like how Chinese investors could game the system and get permanent residency in Canada by "investing" the minimum amount of $1,000,000 into the Vancouver property market (a.k.a. buying a house). And as an added bonus, they'd leave the house empty, messing up the rental market and making it harder for Canadians to find somewhere to live. I have absolutely nothing against residency in return for bona fide business investments, but there's gotta be some element of risk involved for the investor. Getting a sweetheart deal from the government and then investing in the public sharemarket is in no way a benefit to the country. It'd be a very different story had Thiel actually continued to make investments in the local startup community after getting his citizenship. But it sure looks to me like he made a few "investments" for show, got his citizenship (without even setting foot in the country!) and then promptly put his NZ passport into his bug-out bag and moved on to other things.

60 points by lancewiggs 10y ago

trome 10y ago

Is this terribly surprising? Public/Private partnerships usually do not pan out unless you have competent administrators ready to fight for the best deal on your orgs behalf. I do wish we could eject people who actively want to destroy America from the country, but rather we seem to have endless tolerance for Peter Thiel (German) and Milo Yiannopoulos (British) to come here and spread hate speech, plot ways to recreate slavery, etc.

deanpeterson 10y ago
Talk about an echo chamber of left wing fascists. Do you left wing nut jobs even have any clue what conservatives like Thiel stand for or do you just knee jerk to "ban em, ban em all"? I mean after calling them names of course.
joezydeco 10y ago
If we can't eject them we should, at minimum, not give them roles in our government.
api 10y ago
Peter is much more complex but Milo is pretty transparently a professional troll. I'm sure he's overjoyed to get crazy protests at Berkeley and to get banned from Twitter. The more attention he gets the better it is for his brand. He intentionally picks targets that are the most likely to over-react and uses the most inflammatory language he can. I mean this has to be the trolliest trollmobile that has ever trolled: http://media.breitbart.com/media/2016/09/img_4893_1024-640x480.jpg http://media.breitbart.com/media/2016/09/img_4893_1024-640x4... People need to learn to not feed the troll. The worst possible thing you can do to Milo is ignore him.
- Florin_Andrei 10y ago
  > Peter is much more complex but Milo is pretty transparently a professional troll. Peter is a slice of bread with honey on one side and some sort of putrid matter on the other. Milo does not have the honey-tinged side.
  - anigbrowl 10y ago
    I think he's a bit more complex than that and we should avoid overly simplistic metaphors. I am not a fan of Thiel but I have listened to him explain his worldview at length in person and while I dispute many of his assumptions I feel he holds them in good faith and is persuadable. Milo, on the other hand, acts as if he aspires to be the Ernst Roehm of the internet age and I have little tolerance for him.
    - Florin_Andrei 10y ago
      When things go from bad to worse, the time for complexity is gone.
      - anigbrowl 10y ago
        Agreed. I just didn't form the impression that he was actively malicious so much as callously indifferent.
        Florin_Andrei 10y ago
        > callously indifferent I actually agree on that one. But he has tremendous amounts of money and power. In the current small, interdependent world, callous indifference can do a heck of a lot of damage.
- metaphorm 10y ago
  Thiel is possibly an actual vampire, or at least aspires to be one.
kevinpet 10y ago
Destroy America by advocating for diminishing the scope of the first amendment?
- anigbrowl 10y ago
  Nobody has diminished the scope of the first amendment, which has never been unlimited and whose exercise Milo Yiannopoulos and his affiliates actively seek to limit for others.
  - happyrock 10y ago
    > whose exercise Milo Yiannopoulos and his affiliates actively seek to limit for others. How so?
    - anigbrowl 10y ago
      I'm really tired of re-explaining this (not necessarily on HN) so I ask you to forgive me for stating it very briefly. Also, I'm not going to defend this particular content below from disagreement because I'm tired - some other day I'd be happy to. In a nutshell, Milo argues that queers should go back in the closet, women should get back in the kitchen, and colored people should go back where they came from. He consistently delegitimizes and intimidates people he dislikes (which seems to be most of them), thereby creating a 'chilling effect' that dissuades them from exercising their own rights - 'chilling effect' is a legal term of art that's worth looking up if you're not familiar. Moving on to the affiliates, by which I mean those who identify with him or subscribe to his views, my argument is simpler: some of his supporters shoot people. Just over a week ago a protester against his appearance at the University of Washington was critically shot in the stomach. The shooter turned himself in to police, claiming that he thought he was being attacked by a white supremacist, but a review of his Facebook revealed him to be a right-winger who had messaged Milo to request an autographed hat an hour before the shooting. He's still walking free AFAIK. Likewise I'd point to the deaths of 6 people at the hands of a gunman in a mosque in Quebec city last week, and to the deaths of 9 people in Charleston last summer at the hands of a right-winger whose avowed intention (restated at trial) was to provoke a race war. I could go on an on. Violent protest by anti-fascist groups and the like should always be questioned and examined, given the variety of motivations claimed - I don't lose much sleep when I see property damage take place, but that's cause it's not my property or business. It's not a form of discourse* that should be resorted to lightly or enthusiastically - we have sports for people who just need to blow off steam. However, where there is abundant evidence of violence being systematically deployed against persons - even if it's on a distributed ad-hoc basis rather than the product of a hierarchical command structure then I absolutely believe that it's appropriate to employ it in return in defense of self or others. I reject the argument that some people make that people are never allowed to act violently until they've already suffered an injury (at which time it might well be too late to adequately defend oneself), Where a credible fear of violence exists, so does a right to defend against it. From a American legal standpoint, you might want to look into the concepts of 'fighting words' and the technical definitions of assault. If I brandish a hammer and say I'm gonna get you, happyrock!' you're generally not obliged to wait for me to actually hit you with the hammer before punching me in the nose. Obviously I'm treating several complex subjects very superficially in a short internet comment, but I hope you can agree that these are things I've thought carefully about rather than just expressing a momentary emotional outburst. * No doubt someone will say that violence is antithetical to discourse, but I agree with Clausewitz that 'war is the continuation of politics by other means.'
edblarney 10y ago
"Public/Private partnerships usually do not pan out unless you have competent administrators ready to fight for the best deal on your orgs behalf." No - they fail 95% of the time because government administrators have no clue how to be running VC investment vehicles in the first place, which is why they have to hire people like Thiel. I don't think it turned out so badly. 'Bad' would have meant all the companies went bust. A public/private 'investment vehicle' that actually funds successful startups is a huge win - because it's rare. Not to be too defensive of Thiel - but one could argue that it was Thiel's participation that made the fund successful. Most of these government VC things fail badly, and it's one of the things that is way, way out of their competency. It's possible that the structure of the org could have been done a little bit better, but then possibly it would have been hard to attract someone like him. The governments goal was more along the lines of trying to spur entrepreneurial activity - they got that + a little bit of profit. That they didn't get more is not a bad thing. In the vast majority of cases - they would have failed to spur activity - and lost a pile of money. So, the situation should be characterized as a 'win' just not as good as people would have liked.
- vorg 10y ago
  > The governments goal was more along the lines of trying to spur entrepreneurial activity - they got that Virtually all the fund's investment went into one company (Xero). If Thiel had already decided to invest in that company anyway (a plausible scenario), then his deal with the NZ govt is equivalent to receiving a free call option (if I remember my Options Theory correctly). And no entrepreneurial activity would have been spurred.
  - edblarney 10y ago
    I'm not making the case that Thiel's involvement may have been marginal - rather, simply that it could have been material. But more so the general case: Governments do some things well - but not VC. And that if it requires collaboration with more aggressive VC's to spurn activity, well, then that's not so bad because it's very hard to do.
cylinder 10y ago
Interesting thing here is that is an example of why privatisation is bad (the people get scammed), but at the same time an example of government's administrative incompetence (which can be an argument for privatisation). Personally, I'm tired of all this neoliberal bullshit and would rather just figure out a way to make our public institutions run extremely well.
deleted 10y ago
[deleted]
messick 10y ago
I think Peter can be kind of an asshole in some areas, but for all his faults, he isn't even in the same asshole universe as Milo.

ag56 10y ago

Isn't this kind of the point? The NZ governments goal was to increase private investment, not make a return. They succeeded -- Thiel put $6.8m to work in NZ that he may not have otherwise. Many countries do this. For example in the UK the British Business Bank will become an LP in a VC fund acting as a multiplier on capital raised. You may not agree with the government's decision, but you can hardly blame Thiel for making use of it.

kiwidrew 10y ago
Thiel put the vast majority of this money towards buying Xero shares on the public sharemarket. Hard to call that a bold investment strategy. As if that wasn't low-risk enough, he then managed to buy these shares on 50% margin (that's the NZVIF portion) and double his potential profit AT NO ADDITIONAL RISK.
- boznz 10y ago
  Agree, Nobody likes to see their government whoring out citizenship's (there's no other word for it!) but if they do they they should be be honest and sell the passport for cold hard cash to use in infrastructure or social projects, NOT for investing in real estate (which fucks up the local market) nor stock market investments where there is more chance of actually gaining money in the deal.

angry_napkin 10y ago

It appears that was the point. It's not like he sailed in and viciously took advantage of everyone. I suspect this is on HN for a very specific reason.

deanpeterson 10y ago

Funny how my comment was flagged and banned: Talk about an echo chamber of left wing fascists. Do you left wing nut jobs even have any clue what conservatives like Thiel stand for or do you just knee jerk to "ban em, ban em all"? I mean after calling them names of course.

sctb 10y ago
Users flagged that comment for being uncivil and unsubstantive, as in, against the guidelines of this site. Not only have you continued to comment uncivilly, but most of the comments from the account have been this way. We didn't yet ban the account before, but we've done so now.
- superduper36 10y ago
  Wow, the bar for "uncivil" seems to be really low only for conservative posters on HN.
  - sctb 10y ago
    Any reasonable bar for incivility must surely catch the kind of name calling present in your comments (and specifically mentioned in the site guidelines), not to mention reposting it once flagged by the community. There are civil and uncivil posts on both sides of most issues on HN, including this one. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- boznz 10y ago
  why is there no link to flagged comments so we can make up our own opinion (were all grown-ups here!)
  - grzm 10y ago
    If you want to read killed comments, set showdead on in your profile.

kiwidrew 10y ago

Personally, I think that the part of this deal that stinks is that the Valar/NZVIF partnership only invested in TWO companies; the majority of funds were just used to buy Xero shares on the public market (yes, they were already listed on the NZX sharemarket by this point). That's kind of like how Chinese investors could game the system and get permanent residency in Canada by "investing" the minimum amount of $1,000,000 into the Vancouver property market (a.k.a. buying a house). And as an added bonus, they'd leave the house empty, messing up the rental market and making it harder for Canadians to find somewhere to live. I have absolutely nothing against residency in return for bona fide business investments, but there's gotta be some element of risk involved for the investor. Getting a sweetheart deal from the government and then investing in the public sharemarket is in no way a benefit to the country. It'd be a very different story had Thiel actually continued to make investments in the local startup community after getting his citizenship. But it sure looks to me like he made a few "investments" for show, got his citizenship (without even setting foot in the country!) and then promptly put his NZ passport into his bug-out bag and moved on to other things.