IBR Success Sunday – Tim Draper

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Welcome to Success Sunday!

The place where investors, entrepreneurs and business professionals come to get inspiration. We’re bringing you unbelievable stories from millionaires and billionaires to inspire you and motivate you to start your week the right way.

In this installment of Success Sunday, we will be learning more about the venture capitalist Tim Draper. Draper was destined for greatness in the business world from a young age and continues to deliver on his success to date.

 

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Draper started is success early on, as opposed to the past personas he was the third in a familial line that consists of venture capitalists and government officials. Tim’s father was the founder of Draper & Johnson Investment company and was the former president of the Export-Import Bank of The United States.

To make his familial ties even more impressive his grandfather was the founder of Draper, Gaither, and Anderson and also served as a first ambassador in NATO. These major influences in his life catapulted him into the business world with knowledge unmatched by any other.

Tim Draper decided to start his own venture capital firm in 1985. This proved to be a risky, but impressive maneuver on his part. After gaining partnerships with his former colleague John H.N. Fisher in 1991 and business student Steve Jurvetson in 1993. Together they formed the DFJ venture capital firm and hit the ground running.

One of their first successful ventures was Hotmail.

Draper was presented with the email company Hotmail that attached an advertisement at the end of every email sent, helping Hotmail gain a tremendous amount of revenue.

This idea in 1996 is now coined as “viral marketing”, but Draper saw that this was the deal of a lifetime and capitalized on it. Within a year Hotmail had 8.5 million subscribers and had revenue unmatched by any other email platform.

This early success was only the beginning for Draper and his colleagues. Tim Draper was able to back Skype in 2004 as he saw a major upside to this video-calling platform. By the time Skype was sold to eBay in 2005 they held a 10% stake in the company valued at $4.1 billion. 

The DFJ venture capital firm also had major holds in Bitcoin. At one point Draper bought 2000 shares of bitcoin valued at $200 in 2015 and predicted it would skyrocket over the next 3 years. This proved to be a key investment as Bitcoin reached 10,000 a share in 2017.

Other successful investments worth noting would be in Twitch, Tesla, and Robinhood which have all given him and his venture capital firm unmatched revenues to date. 

Draper was able to gain most of his success from investing in many successful tech startups that have almost become household names as of today. He lives by one key philosophy when deciding where to invest his money.

“All these things could go wrong in lots of ways, but the thing that really matters is if it’s successful, how big could this get?”

This has proved to be effective as he now has a net worth of over $1 billion.

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THE BUSINESS CARD:

  1. Made his first million investing with: Parametric 
  2. Thoughts on the economy: “Free markets are amazing”
  3. Advice to College Graduates: “If you want to be a visionary, go out and have some accidents!”
  4. Biggest takeaway in business: “And whenever somebody says I can’t do something, I always think, How would I, if that were a possibility?
  5. Advice to venture capitalists: “Failure hurts, but failing is a part of the free market”
  6. Investment Advice: “Why Would I Sell the Future for the past?”
Matthew Filsinger

Matthew Filsinger is an undergraduate Economics student at Ashland University in Ohio. During his time as a college student, Matthew has found a passion for understanding how certain consumer and producer behavior affect the valuation of equities. He prides himself on contrarian thinking, not afraid to go against the status quo. This behavioral approach to a numbers-driven financial climate has helped him grow his personal portfolio by 33%. When Matthew is not busy researching, he finds himself competitively swimming as captain of the nationally-ranked Ashland University Swim and Dive Team.

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