Bloomberg says that the San Francisco firm is raising the money to invest in both early stage and more established startups. Founders Fund plans to close the fund this month. It comes after the slowest quarter for venture capital in eight years.
This fund would dwarf the previous Founders Fund, which closed in July and raised $250 million to invest in Internet and engineering startups.
Thiel, 44, co-founded PayPal in 1998 and led as CEO before selling to eBay for $1.5 billion in 2002. He used his winnings to launch hedge fund Clarium Capital Management. Later launched Founders Fund with PayPal alums Ken Howery and Luke Nosek. They raised their first fund in 2005.
Thiel was Facebook's first outside investor and director.