Peter Thiel likes to complain that science has under-delivered. "We wanted flying cars, instead we got 140 characters," Thiel has said (read Peter Thiel's IP profile).
Thiel wants to fund bigger breakthroughs as an investor — through his Founders Fund — but also as a philanthropist. So it is that the Thiel Foundation has a program called "Breakout Labs," which supports innovators working "at the forefront of science and technology" who have "radical ideas."
How radical? Well, as the foundation explains, Breakout Labs wants to fund things that wouldn't attract federal research funds, which it says are allocated based on what's acceptable within the academic mainstream. "Bold innovation often requires a break from the consensus," the foundation says. And Breakout Labs also is drawn to ideas that might not get venture funding "because of their apparent lack of focus."
All this sounds pretty cool, actually. Breakout Labs sounds like a fund for kooky genuises who'll never clear "peer review" or impress money-obsessed venture capitalists.
But wait, there's more: The Thiel Foundation is also using a novel model of philanthropy with Breakout Labs. The Foundation is giving grants to companies and, in return, receiving a financial return — like a royalty stream or equity stake — that goes back into Breakout Labs to fund future grants. "We are a revolutionary, revolving funding model by which successful projects help to fund the next generation of audacious scientific exploration."
In addition, Breakout Labs asks that its grantees share their knowledge in the public domain to maximize "the dissemination of the resulting innovations, through publication and intellectual property development."
All this is cool, too. If this approach works, it has the potential to not just be self-sustaining, but to create a fund that gets bigger and bigger over time. If Breakout Labs gives grants to a few companies that are wildly successful, it could find itself rolling in cash — resulting in a wider field of investments, more big returns, and so on. Basically, this is a venture capital model, only the partners and investors don't pocket the winnings; all the money gets recycled to fund yet more radical geniuses.
Again, though, that assumes this venture works. Which might not be the case.
I'm all for bankrolling mavericks, but it's worth asking: If these people can't raise money from mainstream research sources and can't attract venture funding, then what's the likelihood that their ideas will actually succeed?
Breakout Labs is still new, so the answer won't be known for a while. In any case, a look at its six grant recipients so far — most of whom have gotten between $50,000 and $350,000 — reveals that the innovators it is backing aren't so kooky after all. Nearly all are well-credentialed entrepreneurs with long experience in their fields.
The six companies Breakout Labs is funding including Arigos Biomedical, which is working on cyropreservation; Longevity Biotech, which is working on artificial protein technology; and Inspirotec, which is developing a universal system for collecting and identifying virtually any airborne agent.
None of that sounds too far out. (Okay, maybe cyropreservation.)
So how does a cutting edge company get a big bag of cash from the Thiel Foundation? The Breakout Labs website is pretty user friendly, and it encourages people to submit "pre-proposals" to see if their idea is in the ballpark.
My guess is that Breakout Labs is going to be getting a lot of proposals.