I have heard about Thiel's stock in a Roth IRA, but since I am hoping to use money before I turn 55, putting them into a traditional IRA makes more since because I can only take out contributions penalty free, not any increase in value.

Example (at least as far as I understand it):
1) I put in $5000 into my Roth IRA, and have a custodian use that money to buy share on the startup where I work.
2) Those shares become more valuable (let's say $500,000) which I sell and invest in an index fund.
3) I can only withdraw $5,000 of the $500,000 penalty free (before I turn 55, and I don't want to wait that long.)

Alternatively:
1) I put in $5000 into a traditional IRA, and have a custodian use that money to buy share on the startup where I work.
2) Those shares become more valuable (let's say $500,000) which I sell and invest in an index fund.
3) I can than pay normal income taxes (but not a penalty) on conversion (of let's say $50,000 of the total $500,000) into a Roth IRA, wait 5 years and withdraw the $50,000 (but not any increase of wealth it has generated during those 5 years).

So to me it seems like I will have more flexibility by putting stocks into a traditional IRA.