00011. How Tim Draper, the Legendary Venture Capitalist, Built DFJ and Made Iconic Investments in Skype, Hotmail, Tesla, Baidu, and More

On today's episode of Gritty Founder, Kreig Kent talks with Tim Draper about some of his biggest wins and losses as a venture capitalist. Tim also shares what he looks for when investing in businesses and founders.

Tim Draper founded Draper Associates in July 1985, which when joined by John Fisher and Steve Jurvetson, became the venture capital firm of Draper Fisher Jurvetson (now DFJ). Investments include Skype, Hotmail, Tesla, Baidu, and others. With Draper Associates, investments include Twitch.TV, YeePay, Indiegogo, Docusign, and AngelList. He founded Draper Venture Network, a global network of venture funds working together to improve service to entrepreneurs, covering 30 cities around the world. He has been listed as #46 of the most outstanding Harvard alumni, #7 on the Forbes Midas List, #1 Most Networked Venture Capitalist by AlwaysOn and #98 on the 2014 Worth Magazine 100 Most Powerful People in Finance.


Some Questions Kreig Asks Tim:

- What do you look for in a founder? (7:26)

- What do you think of the new way of starting companies? Fifty years ago, there was not a venture capital industry, and there were not a lot of people who would give you money and risk that money on a startup, and people just bootstrapped their businesses. Do you think the mentality of starting a business has changed and entrepreneurs think differently now? (14:18)

- Has there been a time when you've backed an entrepreneur who you've felt did not have the right business model or hadn't figured out all the aspects of their business, but you truly believed in the entrepreneur? (16:48)

- What are some failures that you've had in your journey as a venture capitalist? (19:13)

- What is some advice that you can give to the Gritty Founders listening to this episode? (25:21)

- What would you tell entrepreneurs who are working on a business right now who think they need an investor to give them some money? (27:14)

In This Episode, You Will Learn:

- About Tim's background, how he got into venture capital and started Draper Associates (2:38)

- Why Tim looks for businesses in industries that charge too much for too little (7:51)

- Signals Tim looks for in founders (9:54)

- Why Tim says entrepreneurs should never personally guarantee anything (12:06)

- About the risks of borrowing money (12:40)

- Why looking at venture capitalists as your customer is a huge mistake (15:15)

- Why Tim invested in Hotmail (17:04)

- A few companies Tim should have invested but didn't (21:01)

- The story of why Tim didn't invest in Airbnb (23:20)

- The importance of feeling like you have a mission when building a company (25:39)


Connect with Tim Draper:

Twitter


Personal Website


DFJ Venture Capital


Also Mentioned on This Show...

Tim's favorite quote:

"With great power comes great responsibility." ―Stan Lee

Tim's book recommendation:

The Startup Game by William Draper