Key Takeaways
- • Jack Selby, managing director at Thiel Capital, says only eight firms raised roughly $70 billion in venture capital this year, a sign of the industry's weak record of returning capital to LPs over the past decade.
- • Roughly 90% of venture capital goes to California, New York and Massachusetts, and Selby argues that concentration is financial rather than human, pushing founders toward those hubs.
- • Selby, one of the first ten PayPal employees, is a 27-year partner of Peter Thiel and credits a 'best athlete' hiring approach over payments expertise.
- • His second fund, Copper Sky, invests across the 47 other states at roughly one-tenth of Silicon Valley valuations, sector-agnostic, targeting 'rockstar entrepreneurs.'
- • Selby explicitly calls today's AI investment boom a bubble and argues that entry price matters more than finding the next trillion-dollar company.
Summary
In an interview with David Weisburd for the 'How I Invest' series, published November 2026 by Dealroom, Jack Selby, managing director at Thiel Capital, described a venture industry with a liquidity problem. He said the sector has done a poor job returning capital to investors over the last decade, which he argues explains why only eight firms raised roughly $70 billion this year. According to Selby, capital still willing to back private tech is concentrated in late-stage AI deals.
Selby, one of the first ten PayPal employees, credited Peter Thiel's hiring approach, which prioritized the smartest people over payments experts. He noted that the executive team's average age on the IPO roadshow was 26. He said the eBay sale, around $1.5 billion in 2002, gave employees a taste of success they wanted to repeat. He has worked with Thiel for 27 of the 28 years he has known him, and describes Thiel's strength during the PayPal period as hiring. The constant fraud attacks, with Max Levchin leading the defense against Russian mobster attempts, forged the team.
On geography, Selby said roughly 90% of venture capital goes to California, New York and Massachusetts, and that the concentration is growing. He argues the Silicon Valley network effect is financial rather than human: talent is distributed everywhere, but capital is not, which creates a circular dynamic that pushes founders to relocate. He cites Carvana, founded by Ernie Garcia Jr., which he says raised $65 billion in market cap after failing to raise on Sand Hill Road and bootstrapping with his father in Arizona. He believes the next such company could come from Phoenix, Milwaukee or Cincinnati, since AI-enabled businesses need not be built in Palo Alto, unlike the next Anthropic.
Selby's second fund, Copper Sky, invests in the other 47 states at roughly one-tenth of Silicon Valley valuations. It is sector-agnostic and seeks 'rockstar entrepreneurs' rather than specific industries, which he contrasts with the access-constrained, expensive frontier-lab investing market. He is explicit that today's AI investment boom is a bubble, even as it enables smaller teams to build valuable companies outside traditional hubs. He argues entry price matters more than identifying the next trillion-dollar company.
Selby, one of the first ten PayPal employees, credited Peter Thiel's hiring approach, which prioritized the smartest people over payments experts. He noted that the executive team's average age on the IPO roadshow was 26. He said the eBay sale, around $1.5 billion in 2002, gave employees a taste of success they wanted to repeat. He has worked with Thiel for 27 of the 28 years he has known him, and describes Thiel's strength during the PayPal period as hiring. The constant fraud attacks, with Max Levchin leading the defense against Russian mobster attempts, forged the team.
On geography, Selby said roughly 90% of venture capital goes to California, New York and Massachusetts, and that the concentration is growing. He argues the Silicon Valley network effect is financial rather than human: talent is distributed everywhere, but capital is not, which creates a circular dynamic that pushes founders to relocate. He cites Carvana, founded by Ernie Garcia Jr., which he says raised $65 billion in market cap after failing to raise on Sand Hill Road and bootstrapping with his father in Arizona. He believes the next such company could come from Phoenix, Milwaukee or Cincinnati, since AI-enabled businesses need not be built in Palo Alto, unlike the next Anthropic.
Selby's second fund, Copper Sky, invests in the other 47 states at roughly one-tenth of Silicon Valley valuations. It is sector-agnostic and seeks 'rockstar entrepreneurs' rather than specific industries, which he contrasts with the access-constrained, expensive frontier-lab investing market. He is explicit that today's AI investment boom is a bubble, even as it enables smaller teams to build valuable companies outside traditional hubs. He argues entry price matters more than identifying the next trillion-dollar company.
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