Tim Draper: I think there's a really interesting test you should run.
Go around and ask 30-yearolds if they'd rather have Bitcoin or dollars,
and they'll all say Bitcoin.
Ask 50-year-olds if they'd rather have Bitcoin or dollars, they'd all
say dollars.
I wouldn't watch.
I would participate.
That is a much better world than the fight them world, the
tribal world that we've had.
It's not just win.
It's just this is a new society.
And you want to get out in front of this new society.
You want to be a part of this new society.
Or do you want to be a Luddite?
The Luddites died off, didn't they?
Mike Green: Mike Green here in Las Vegas at Crypto Con.
I'm excited to sit down with Tim Draper.
Tim has been a fixture in Silicon Valley for several decades, has invested in any number
of household names that you're aware of.
But I want to spend my time here talking with him about
Bitcoin in particular, and venture capital, how it's changed over the years.
In particular, Tim has been really active in thoughts around governance and the idea
of virtual communities, et cetera.
I want to push a little bit on the ideas of how crypto can be a governing
vehicle, how it can replace Fiat currencies.
And I'm really interested in what Tim's thoughts are on
that.
I hope you enjoy it as much as I know I'm going to.
Tim, you're the closest thing to a scion of venture capital in Silicon Valley that exists.
Third generation, and now you've brought your son
Adam into the business, as well, I guess, your
daughter.
TD: My daughter, Jessie, runs the Halogen Ventures.
She only backs women.
MG: She only backs women.
Interesting.
And now I want to talk about what you're doing with your children and venture capital.
But let's talk very briefly about your background.
So your grandfather-- TD: Yeah, my grandfather was the first venture
capitalist in the Silicon Valley, ever.
And my dad was a great pioneer of venture capital.
He drove Silicon Valley forward in venture capital.
And then I started a venture capital of 30 something
years ago.
And my mission is really to spread venture capital and entrepreneurship around
the world because I've seen what amazing things it
did for the Silicon Valley.
MG: So that's actually an interesting idea.
So I'm a Silicon Valley native as well.
I've actually have seen firsthand how that changed the environment.
But one of the arguments behind the success of Silicon Valley is actually the
concentration, and networking effect of people being face
to face in Silicon Valley along Sandhill Road, et cetera.
When your father and grandfather were doing it, it was far less concentrated.
But it was much more military in nature, right?
It was tied to-- TD: Well, my grandfather was a general, but
my father was again, military.
He fought in Korea for a little while.
But it wasn't military.
I know a little bit about it because when I got started in
venture capital, I would look for developments, new real estate developments.
Where I'd go in, and if one of the people leasing it was called
something software, or something technology, or
whatever, I'd knock on the door and see if they were interested in taking venture money.
So it was a whole different world back then, and now it's just the opposite.
We get deal flow from all sorts of people from all over the world.
And we have to filter it to just those companies that are
extraordinary, or going after industries that really need transformation.
And the best companies have this new technology that can be applied
to a marketplace, where that market is currently served by bad service, high cost, unhappy
customers.
But you have to deal with them because they're a monopoly.
Or oligopolies.
MG: So that's actually a fascinating insight, right?
I mean, you come from an environment or background where the capital was available,
and needed to seek out the ideas to one today, where there's pitches flowing in the door,
right?
How does that change the industry and the dynamic?
How does it change your role?
How do you think about that?
TD: Well, I think supply and demand constantly are in flux in the venture capital business.
There are times when there's a lot of money available,
and not that many entrepreneurs, people willing to take the risk.
And then there are times when there are a lot of entrepreneurs, like a new
technology comes along like Bitcoin, and suddenly, there are thousands and thousands of
entrepreneurs who all say, hey, now I've got an idea, and I want to go get you some money.
And it's interesting how the dynamic swings back
and forth, either in favor of the entrepreneur or favor
of the venture capitalist.
But overall, we just tend to want to do deals that are fair.
Where both parties are happy, because it isn't like it's a quick hit, and you go.
It's more like when we make an investment, we're with them
until the end, whatever the end may be.
And so we want to align ourselves with the entrepreneur.
MG: So when you think about that, and you think about there being thousands of entrepreneurs
that have opened up in the Bitcoin universe, for example, how do you go through the process
of vetting an idea?
Or what are you looking for in an idea in a nascent space that hasn't traded its
commercial potential in the same way as say, social networks did post Facebook, or even
Myspace?
How do you think about what you're actually looking for in a venture capital
investment?
TD: So we're always looking for an entrepreneur who is looking to transform one of those
industries, but has a new technology, or new way of looking at it.
And it's something that entrepreneur was specifically put on the earth for.
It has to feel like this was meant to be.
Another way to look at it is, is this unique enough
to build a great, not just a business, but an industry
around?
And that is rare to come by.
And so we filter through a lot of entrepreneurs who are doing things
that are MeToo or something it a little twist.
Where we're looking for a complete overhaul of an
industry.
So we look for new ways of doing things.
So like this chair might have been-- people might come to me and say, hey, I got a new
kind of chair.
That is what I'm looking for.
I'm looking for somebody who says the idea of putting
someone at rest and comfortable in a certain space.
Maybe it's not a chair, maybe it's a floating device.
Maybe it's something like you see in the Dune movie or something.
So we're really looking for those sort of transformative ideas.
And that's why when we invest, half of them don't work.
But we're encouraging people to go ahead and take those chances because
for society as society just moves forward much faster if people take risks.
MG: You highlight this idea of taking risks, right?
And ultimately, that's what strikes me as unique
about the US model in venture capital, right?
I mean, we take it for granted that people are
allowed to go bankrupt or people are allowed to reinvent themselves.
People are allowed to start all over again.
In the history of the world, it's a relatively recent invention.
Limited liability corporations, and the idea of consumers and
entrepreneurs being able to clear themselves of debt
late 19th century, right?
Does the unique aspect of Silicon Valley, where so many people are
capable of failing-- do you think that's replicable in other areas of the world or in other regions?