Thiel Capital’s Jack Selby nabs stakes in hot startups like Etched through Arizona connections

Thiel Capital's Jack Selby nabs stakes in hot startups like Etched through Arizona connections

Jack Selby has built a venture career on arbitrage — geographic, industrial, and relational. The former PayPal executive and longtime managing director at Peter Thiel's family office, Thiel Capital, has parlayed his Arizona board seats and TSMC ties into a pipeline that most coastal VCs would kill for: direct allocation in oversubscribed hardware rounds like Etched's $120 million Series A.

The Arizona leverage play

Copper Sky Capital, the Phoenix-based firm Selby founded in 2021 (originally AZ-VC), didn't win Etched's Series A on brand recognition. The four-year-old AI chip startup, now valued at $5 billion, had no shortage of Sand Hill Road suitors. What Copper Sky offered was a credible path to domestic silicon production — specifically, a future allocation at TSMC's Arizona GIGAFAB.

Selby's pitch was explicit: invest now, and we'll help you reshore fabrication from Taiwan to Phoenix. As a board member of the Arizona Commerce Authority, he sits at the intersection of state industrial policy and TSMC's $65 billion U.S. expansion. That's not typical VC value-add. It's infrastructure diplomacy.

Etched's manufacturing reality check

Etched's announcement this week that TSMC manufactured its first chip earlier this year marks a technical milestone. But the startup's roadmap — shipping systems to customers later this summer — collides with a hard constraint: TSMC's Arizona fab won't reach volume production until 2025 at earliest, and even then, advanced process nodes (3nm, 2nm) will remain concentrated in Taiwan for years.

Copper Sky's bet is that the timeline converges. Etched gets early Taiwan supply; Arizona capacity comes online for volume ramp. The risk is that Etched becomes another chip designer stuck in the TSMC allocation queue, Arizona fab or not.

Beyond the Southwest thesis

Copper Sky's first $115 million fund targeted Arizona and Southwest startups on a valuation arbitrage thesis: coastal companies are overpriced; regional gems are overlooked. But Etched — a Cupertino-based hardware company — broke that model. Selby called it "bridging the gap in the other direction."

The firm is now raising a $300 million second fund, per regulatory filings, and expanding nationally while doubling down on hardware and defense companies that can manufacture in Arizona. The pivot acknowledges a reality: the best hardware deals still originate in California. But the best manufacturing economics increasingly point to Phoenix.

Thiel network, Arizona execution

Selby's Thiel Capital pedigree opens doors. His Arizona Commerce Authority role keeps them open. The combination is rare in venture: a GP who can call a TSMC executive and a governor's office in the same afternoon. That relational density compounds — each hardware portfolio company that commits to Arizona strengthens Selby's pitch to the next one.

It's a flywheel that coastal firms can't easily replicate. Andreessen Horowitz can write bigger checks. Sequoia has deeper brand. But neither has a board seat on the state agency courting TSMC's second U.S. fab.

The defense optionality

Copper Sky's stated interest in defense hardware adds strategic dimension. The CHIPS Act and Pentagon's "trusted foundry" requirements create tailwinds for domestic silicon. Startups that can design in California and fabricate in Arizona — with Selby navigating both ecosystems — sit at a valuable intersection.

Whether the $300 million fund closes on schedule and deploys into enough winners to return the fund remains unproven. But Selby has identified a structural inefficiency — coastal hardware startups needing domestic fab access, Arizona needing anchor tenants — and positioned Copper Sky as the bridge. In venture, that's often enough to get allocated.

The Etched investment proves the model works once. The next two years will show if it scales.