MENLO PARK, Calif., June 20 (UPI) -- Two California investors said they had begun a venture capital fund with $402 million in start-up money they would use to solve some esoteric problems.
Peter Thiel, a co-founder of PayPal, and investor Ajay Royan said the new fund, Mithril Capital Management, would fund companies attempting to solve problems "where there has not been a lot of innovation," the San Jose (Calif.) Mercury News reported Wednesday.
"We want to be agnostic of the trends of the day," Royan said.
Royan said the fund would consider financing growing companies that "could be in German and Sweden and Israel and China and India -- as well as in Menlo Park [Calif.]."
"It's something that transcends developed and emerging markets," he said.
Thiel will head Mithril's investment committee.
The firm, they said, was named after the body armor worn by Frodo in the "Lord of the Rings" series of books by J.R.R. Tolkien.
In a recent movie series based on the books, mithril is described as made by dwarfs and "light as a feather, but hard as dragon scales."
The head of venture capital practice at PricewaterhouseCoopers Tracy Lefteroff was impressed that Thiel and Royan could scare up $400 million to start a fund in this day and age.
"That's a substantial fund in this environment," he said. "This has been one of the toughest environments to raise capital in quite a while. The returns of the venture capital industry have been underwater since 2001."
