Tim Draper is a Silicon Valley venture capitalist who founded Draper Fisher Jurvetson (DFJ), Draper Associates, the Draper Venture Network, and Draper University; since 2019 he…
Tim Draper is a Silicon Valley venture capitalist who founded Draper Fisher Jurvetson (DFJ), Draper Associates, the Draper Venture Network, and Draper University; since 2019 he has been a partner in Draper Goren Holm. ◦ He is a third-generation venture capitalist: his grandfather, William Henry Draper Jr., founded Draper, Gaither and Anderson in 1958, and his father is William Henry Draper III, former chairman of the Export-Import Bank. ◦ Draper and Steve Jurvetson coined the term "viral marketing," a concept Draper applied to Hotmail through his idea of automatically attaching a brief advertising message to the bottom of outgoing Hotmail emails. ◦ His most prominent investments include Baidu, Hotmail, Skype, Tesla, SpaceX, AngelList, SolarCity, Ring, Twitter, DocuSign, Coinbase, Robinhood, Ancestry.com, Twitch, and Cruise Automation. ◦ On June 27, 2014, Draper paid about US$19 million for nearly 30,000 bitcoins which had been seized from the Silk Road by the US Marshals service. ◦
Draper has spoken out for free markets and entrepreneurship globally, and against Sarbanes-Oxley regulations. ◦ On investment philosophy, Draper said: "If you were thinking, 'Hey, I can do this so I can make money,' don't even start . . . You do it for the mission." ◦ Draper's Startup Hero's Pledge, which he wrote as a code to live by, includes the lines "I will promote freedom at all costs," "I will fail and fail again until I succeed," and "I will make short-term sacrifices for long term success." ◦ The Pledge also contains a Black Swan Clause: "I am bound to this oath unless in my travels I determine that the oath has somehow missed something important and extraordinary." ◦ On Bitcoin's role, Draper said: "It is replacing one of the biggest, laziest bureaucracies there are, which is banking and partly government." ◦
Draper described how he gets on board with a startup: "I like that mission; I like the world the way it's going to be because of this mission. Let me get on board." ◦ On evaluating markets early, Draper said: "In the early stage, you say 'How big is this market?' but more importantly, 'Is this business going to be able to get a wedge into that market?'" ◦ On sizing early-stage checks, Draper warned: "Don't put in as much as you think you want to put in [because] you are going to be tight at some point." ◦ On time horizon, Draper said: "What I wouldn't do is think too far out…. I think you ought to start thinking in 5- to 10-year increments." ◦ Asked what he looks for, Draper answered plainly: "I look for the passion." ◦ Draper explained the passion he seeks: "When I meet with the entrepreneur, I'm really looking for passion, but it's got to sort of be inside of them. I'll ask questions and pull it out of them. Like, why are you doing this? ... And that kind of passion is the beginning of a trillion dollar business that I'm looking for." ◦ On disruption, Draper taught: "If you are having an easy time fundraising for your company, you're probably not pushing the envelope enough. Truly disruptive companies should seem crazy to most investors." ◦
Draper evaluates early-stage markets by asking not only "How big is this market?" but more importantly, "Is this business going to be able to get a wedge into that market?" ◦ He thinks in "5- to 10-year increments" rather than too far out. ◦ He views failure as iterative, pledging to "fail and fail again until I succeed." ◦ He holds a Black Swan Clause, reserving the right to break his oath if he determines it "has somehow missed something important and extraordinary." ◦ He treats disruption as a signal of value, teaching that "if you are having an easy time fundraising for your company, you're probably not pushing the envelope enough." ◦ He insists fun is a precondition for greatness, saying he had never seen a great company that got there without having lots of fun along the way. ◦
Draper has built and led multiple venture firms, including DFJ, Draper Associates, the Draper Venture Network, and Draper University, and since 2019 has been a partner in Draper Goren Holm. ◦ He coined the term "viral marketing" with Steve Jurvetson and applied it to Hotmail. ◦ His investment portfolio spans Baidu, Hotmail, Skype, Tesla, SpaceX, AngelList, SolarCity, Ring, Twitter, DocuSign, Coinbase, Robinhood, Ancestry.com, Twitch, and Cruise Automation. ◦ He purchased nearly 30,000 bitcoins seized from the Silk Road by the US Marshals service. ◦ He believes the Bitcoin network will replace banking and government bureaucracies, saying: "It is replacing one of the biggest, laziest bureaucracies there are, which is banking and partly government." ◦ He noted that "all the great engineers in blockchain are building on the Bitcoin blockchain." ◦
Draper answers questions plainly, as when asked what he looks for he stated simply, "I look for the passion." ◦ He uses direct questioning to draw out founders' motivations, saying he will "ask questions and pull it out of them. Like, why are you doing this?" ◦ He employs imperative, high-energy directives, telling students: "So, what do you do once you have everything in place? … YOU JUMP IN!" ◦ He frames his philosophy through formal pledges and oaths, such as the Startup Hero's Pledge and its Black Swan Clause. ◦
Draper pledges to "promote freedom at all costs" yet includes a Black Swan Clause that lets him abandon the oath if he finds it "has somehow missed something important and extraordinary." ◦ He advocates against regulation such as Sarbanes-Oxley yet purchased bitcoins seized by the US Marshals service. ◦ He counsels restraint in early-stage check sizing—"Don't put in as much as you think you want to put in [because] you are going to be tight at some point." ◦ while simultaneously making a roughly $19 million single-asset Bitcoin purchase. ◦ He demands that entrepreneurs show deep, intrinsic passion for trillion-dollar missions. ◦ He also tells them to make "short-term sacrifices for long term success." ◦ At the same time, he insists he has "never seen a great company that got there without having lots of fun along the way." ◦
Founders should lead with mission, as Draper gets on board when he likes "that mission" and "the world the way it's going to be because of this mission." ◦ They must demonstrate passion that is "inside of them," because Draper will ask questions such as "why are you doing this?" to pull it out. ◦ They should signal genuine disruption by showing they are "not pushing the envelope enough" if fundraising is easy, since "truly disruptive companies should seem crazy to most investors." ◦ Finally, they should be ready to act decisively, because once everything is in place, Draper expects them to "JUMP IN!" ◦