Tim Draper

Timothy Cook Draper (born June 11, 1958) is an American venture capital investor, and founder of Draper Fisher Jurvetson (DFJ),[3] Draper University, Draper Venture Network, Draper Associates[4] and Draper Goren Holm. His most prominent investments include Baidu, Hotmail, Skype, Tesla, SpaceX, AngelList, SolarCity, Ring, Twitter, DocuSign, Coinbase, Robinhood, Ancestry.com, Twitch, Cruise Automation, PrettyLitter and Focus Media. In July 2014, Draper received wide coverage[5] for his purchase at a US Marshals Service auction of seized bitcoins from the Silk Road website. Draper is a proponent of Bitcoin and decentralization. Draper was also one of the first investors in Theranos.[6]

Tim Draper
Draper in 2022
Born
Timothy Cook Draper

(1958-06-11) June 11, 1958
East Chicago, Indiana, U.S.[1]
EducationStanford University (BS)
Harvard University (MBA)
OccupationVenture capitalist
SpouseMelissa Parker[2]
Children4, including Jesse
RelativesWilliam Henry Draper Jr. (grandfather)
William Henry Draper III (father)
Polly Draper (sister)
Nat Wolff (nephew)
Alex Wolff (nephew)
WebsiteOfficial website

Background and education

Draper is the third in a familial line of venture capitalists and government officials. He is the son of Phyllis (Culbertson) and William Henry Draper III and the younger brother of actress Polly Draper. His father is the founder of Draper & Johnson Investment Company and former chairman and president of the Export-Import Bank of the United States. His grandfather, William Henry Draper Jr., founded Draper, Gaither and Anderson in 1958 and served as the first ambassador to NATO.[3]

Draper attended Phillips Academy Andover before matriculating to Stanford University, where he graduated with a BS in electrical engineering in 1980.[7] He later earned an MBA from Harvard Business School in 1984.[3]

While at Stanford, Draper interned at Hewlett-Packard as a marketing engineer. Draper made national headlines as a student when he created the popular campus board game "Stanford - The Game" alongside Heidi Roizen, who was a student at the Stanford Graduate School of Business at the time.[8]

Investment career

Early business career

In 1985, Draper left the investment bank Alex. Brown & Sons to start his own venture capital firm. Former colleague John H.N. Fisher became a partner in 1991, and business student Steve Jurvetson became the third partner in the firm in 1994.[9]

Hotmail and viral marketing

Draper invested in Jack Smith and Sabeer Bhatia, who presented him with their company, Hotmail. While numerous publications intimate that he "invented viral marketing" in 1996, this major acclaim was his early support for the founders, due to his idea of automatically attaching a brief advertising message to the bottom of outgoing Hotmail emails.[10] Draper and Jurvetson then coined the term "viral marketing", though the neologism itself is documented as early as a 1989 edition of PC User.[11]

Baidu

Draper was the first Silicon Valley venture capitalist to invest in China through the global fund DFJ ePlanet.[12] In 2001, Draper negotiated with CEO Robin Li of Baidu to buy 28% of the company on behalf of ePlanet for USD $9 million (~$13.4 million in 2021).[13]

Skype

Draper's father, Bill Draper, was an early investor in Skype, and DFJ backed Skype in 2004.[14][15] The company owned 10% of Skype in 2005 when it was sold to eBay for US$4.1 billion (~$5.55 billion in 2021).[16] Draper and Niklas Zennström appeared in the first Skype video together in 2007 at Stanford University.[17]

Tesla

In 2006, Draper through DFJ was an investor in the Series C venture round of Tesla.[18] In 2007, Draper again invested in Tesla's Series D venture round through Draper Associates.[19]

Bitcoin

On June 27, 2014, Draper paid about US$19 million (~$21.7 million in 2021) for nearly 30,000 bitcoins which had been seized from the Silk Road by the US Marshals service and auctioned to the public.[20][21][22]

On September 23, 2014, Draper told Fox Business that he predicted that one bitcoin would reach $10,000 "in three years";[23] on January 27, 2015, Draper wagered about $400,000 (which is 2000 bitcoins with $200 price) that the bitcoin will rebound from a recent plunge.[24] The price of a bitcoin crossed $10,000 (~$10,986 in 2021) on November 29, 2017.[25]

On April 21, 2018, Draper predicted during an Intelligence Squared debate that "In five years you are going to try to go buy coffee with fiat currency and they are going to laugh at you because you're not using crypto."[26]

In December 2019, he predicted that bitcoin would reach US$250,000 by the end of 2022.[27]

Cruise Automation and Twitch

After funding Twitch, which was sold to Amazon for $1 billion,[28] Kyle Vogt, a founder of Twitch, took Draper for a ride in the Cruise Automation self-driving car. After nearly crashing, Draper funded Cruise. Cruise went on to be sold to General Motors for $1 billion as well.[29][30]

Theranos

Draper was one of the first investors in the blood testing startup Theranos, whose founder Elizabeth Holmes was later charged by the SEC with committing massive fraud.[31] In 2018, after the SEC had already charged Holmes, Draper continued to defend her, saying that she had been "bullied into submission".[32]

Recent investments

Draper's recent investments include Robinhood (company), Coinbase, eShares, Tezos, DefiMoneyMarket, and OpenGov. Draper's recent investments are centered around companies who use artificial intelligence, Bitcoin, blockchain, smart contracts, and computational genomics to apply to industries like finance, health care, and government.[33][34][35][36]

Personal life

Draper played several sports from a young age, including tennis, baseball and basketball.[37] At a height of 193.0 cm (6 ft 4 in), Draper continues to play basketball several times a week with a regular group of players including his son, Adam Draper. [38]

Three of Draper's also children have venture funds. Adam Draper is the managing director of Boost VC. Jesse Draper is the managing director of Halogen VC, and Billy Draper is the managing director of Path Ventures.

Politics

Draper has spoken out for free markets and entrepreneurship globally, and against Sarbanes-Oxley regulations, stating that they limit the viability of taking companies public.[39]

In 2000, Draper spent $20 million (~$30.3 million in 2021) on a failed measure to support school vouchers.[40]

Split California Proposal

In early 2014, Draper filed a petition which was accepted by California's Secretary of State Debra Bowen to begin collecting signatures to divide California into six smaller states, arguing that California is "increasingly ungovernable" as one state.[41] However, on September 12, 2014, it was announced the plan fell short of the required number of valid signatures to land it on the 2016 ballot.[42]

In April 2018 Draper announced collection of "about 600,000" signatures for a new petition to divide California, this time into three new states.[43] In June 2018, the petition collected a sufficient number of signatures to qualify as an initiative in the 2018 general election.[44] On July 18, 2018, the day before ballots were sent to print, the California Supreme Court blocked the measure from appearing on the November 2018 ballot.[45]

Educational program

In 2013, Draper launched Draper University of Heroes, an educational program that offers a crash course in entrepreneurship. The university's residential program is based in San Mateo, California, and the curricula are designed by Draper.[46]

Publications
  • When A Venture Capitalist Enters California’s Political Matrix: Innovation Meets The Status Quo, 2018
  • How to be The Startup Hero: A Guide and Textbook for Entrepreneurs and Aspiring Entrepreneurs, 2017

See also

References
  1. Lu Ann Franklin (July 5, 2018). "Venture capitalist Tim Draper who wants to divide California into 3 states has East Chicago roots". Retrieved July 5, 2018.
  2. "Melissa Lee Parker Becomes the Bride Of Timothy Cook Draper in California". The New York Times. August 15, 1982. Retrieved September 11, 2017.
  3. Entrepreneurs page, Harvard Business School website, accessed April 16, 2014'.
  4. "Exclusive: Tim Draper is leaving DFJ". Fortune. Retrieved March 3, 2017.
  5. Ember, Sydney (December 5, 2014). "Venture Capitalist Tim Draper Wins Small Piece of Bitcoin Auction". The New York Times.
  6. "Why VC Tim Draper Keeps Defending Theranos CEO Elizabeth Holmes". Fortune. Retrieved May 22, 2021.
  7. Melissa Lee Parker Becomes the Bride Of Timothy Cook Draper in California, New York Times, August 15, 1982.
  8. "Former Stanford Students Translate College Life into a Game". The New York Times. November 15, 1981. ISSN 0362-4331. Retrieved October 30, 2019.
  9. Deborah Perry Piscione (April 2, 2013). Secrets of Silicon Valley: What Everyone Else Can Learn from the Innovation Capital of the World. Palgrave Macmillan. pp. 129–. ISBN 978-1-137-32421-4.
  10. Helen Powell; Jonathan Hardy; Sarah Hawkin; Iain MacRury (September 13, 2013). Advertising Handbook. Routledge. pp. 119–. ISBN 978-1-134-71892-4.
  11. Justin Kirby; Paul Marsden (June 7, 2007). Connected Marketing. Routledge. pp. 89–. ISBN 978-1-136-41564-7.
  12. "Tim Draper's DFJ, riding high, breaks with ePlanet Ventures". VentureBeat. December 28, 2005. Retrieved October 30, 2019.
  13. Kanellos, Michael. "The big winner behind Skype and Baidu". CNET. Retrieved October 30, 2019.
  14. "Skype Closes 'B' Round Funding from Top Venture Capitalists" (Press release). PR Newswire. March 15, 2004. Retrieved April 11, 2016.
  15. Bruce J. Schulman (2014). Making the American Century: Essays on the Political Culture of Twentieth Century America. Oxford University Press. pp. 166–. ISBN 978-0-19-984541-5.
  16. Ori Brafman; Rod A. Beckstrom (2006). The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations. Penguin. pp. 176–. ISBN 978-1-59184-143-2.
  17. Singer, Michael. "Skype embraces video phones". CNET. Retrieved October 30, 2019.
  18. "2006: San Carlos start-up Tesla seeks sexier electric car". The Mercury News. July 14, 2014. Retrieved July 17, 2019.
  19. Schulze, Elizabeth (November 7, 2018). "Elon Musk 'probably should have taken' Tesla private, early investor Tim Draper says". CNBC. Retrieved October 30, 2019.
  20. Ember, Sydney (July 2, 2014). "Venture Capitalist Tim Draper Wins Bitcoin Auction". New York Times. Retrieved July 2, 2014.
  21. Harrison Weber (July 2, 2014). "Someone just bought $19M in bitcoins seized by the U.S. government (updated)". VentureBeat.
  22. McMillan, Robert (July 1, 2014). "Someone Just Bought $19M in Silk Road Bitcoins From the Feds". Wired. Retrieved February 9, 2017.
  23. "Venture capitalist Tim Draper predicts $10K per Bitcoin by 2018". TheKapers83. Archived from the original on December 14, 2021. Retrieved July 19, 2018.
  24. Olga Kharif (January 27, 2015). "Venture Capitalist Draper Bets $400,000 More on Bitcoin Revival". Bloomberg.
  25. Huang, Zheping (November 28, 2017). "Bitcoin just hit $10,000 for the first time". qz.com. Retrieved July 19, 2018.
  26. "Bitcoin is More than a Bubble and is Here to Stay". Intelligence Squared. April 21, 2018. Retrieved December 8, 2021.
  27. Archived at Ghostarchive and the Wayback Machine: "Tim Draper predicts the price of bitcoin after the halving!". YouTube.
  28. Shontell, Alyson. "Twitch's $970 Million Exit Is A Big Win For Investors, Who Last Valued The Company At $100 Million". Business Insider. Retrieved October 30, 2019.
  29. Kharpal, Arjun (July 19, 2017). "SoftBank, GM and BMW invest $159 million into driverless car start-up Nauto". CNBC. Retrieved October 30, 2019.
  30. "GM buys Cruise Automation to speed self-driving car strategy". Reuters (in German). March 11, 2016. Archived from the original on July 25, 2019. Retrieved October 30, 2019.
  31. Tindera, Michela. "Elizabeth Holmes And Theranos Charged With 'Massive Fraud' By SEC". Forbes. Retrieved March 20, 2018.
  32. Marinova, Polina (May 11, 2018). "Why VC Tim Draper Keeps Defending Theranos CEO Elizabeth Holmes". Fortune. Retrieved June 18, 2018.
  33. "Carta, a startup that helps other startups, reportedly raising $300M on $1.8B valuation". SiliconANGLE. March 28, 2019. Retrieved October 30, 2019.
  34. "Robinhood CEO Opens Up About How He Convinced Tim Draper to Back His Crazy Idea". Observer. September 10, 2018. Retrieved October 30, 2019.
  35. "Silicon Valley 'civic-tech' companies driving transparency in local government". The Mercury News. July 3, 2015. Retrieved October 30, 2019.
  36. "Billionaire bitcoin enthusiast Tim Draper is backing a new cryptocurrency for the first time". cnbc.com. CNBC. May 5, 2017. Retrieved October 28, 2020.
  37. "Tim Draper: Venture capitalist's eccentricity 'runs deep'". The Mercury News. February 5, 2015. Retrieved February 13, 2023.
  38. "DRAPER FISHER JURVETSON / On the Record: Tim Draper". SFGATE. March 13, 2005. Retrieved February 13, 2023.
  39. David Lawsky and Anupreeta Das (May 22, 2009). "Draper helps take companies "prublic"". Reuters.
  40. Carla Marinucci. July 15, 2014.Six Californias measure heading for 2016 ballot, backers say. SFGate. Retrieved: July 15, 2014.
  41. Kayle Fields, Petition to Split California Into Six States Gets Green Light, ABC News, February 19, 2014.
  42. Chris Megerian (September 12, 2014). "'Six Californias' plan falls short of making November 2016 ballot". Los Angeles Times.
  43. Schubarth, Cromwell (April 13, 2018). "Tim Draper says he has signatures needed for third try to break up California". Silicon Valley Business Journal. Retrieved October 4, 2018.
  44. "Eligible Statewide Initiative Measures - California Secretary of State". California Secretary of State. Retrieved October 3, 2018.
  45. "This is really happening: Measure to split California into three states qualifies for November ballot". The Mercury News. June 13, 2018. Retrieved June 13, 2018.
  46. Kinney, Aaron (April 17, 2013). "San Mateo: Draper University welcomes first class of entrepreneurial 'superheroes'". San Jose Mercury News. Retrieved July 2, 2014.
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