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Tim Draper: Venture capitalist's eccentricity 'runs deep'

February 23, 2015


SAN MATEO, Calif. ó As a third-generation venture capitalist, Tim Draper gauges the motivation of entrepreneurs who pitch him. Are they true believers or opportunists? Are they committed for the long haul, or just hoping to cash out?

Now that heís proposed slicing California into six pieces, the eccentric multimillionaire faces a similar kind of scrutiny. People across the state have gotten their first look at the rumpled tycoon with overgrown eyebrows and a fistful of maps and asked themselves ó "Who the hell is this guy?"

Thereís no question he is one of the most colorful and fascinating characters in Silicon Valley, a place teeming with geniuses and oddballs. He co-owns two safari camps and a luxury island resort in Tanzania, heís guzzled snake blood in Taiwan, and heís swum from Alcatraz to Aquatic Park without a wetsuit. He doesnít touch alcohol but often behaves like heís drunk.

Draper is fueled by an insatiable curiosity about technology and how the world works and possessed of a missionary zeal to disperse the valleyís entrepreneurial spirit into every nook and cranny of the planet.

"I grew up in the Silicon Valley when it was a bunch of apricot groves, and now itís this center of incredible activity," Draper said in a recent interview. "So I have this sense of what technology has done for this region and I want to spread it to the world."

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The people who know Draper best insist that none of this is an act. The larger-than-life persona, the superhero costumes and off-key singalongs at high-tech conferences, even Six Californias, which Draper is still pursuing ó itís all just Tim being Tim.

"Heís an unusual guy, if you didnít figure that out already," said Becky Draper, the elder of Timís two older sisters. "I mean, just what you read in the paperís unusual, but honestly it runs deep."

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Timothy Cook Draper, 56, grew up the scion of Silicon Valley royalty. His grandfather William Henry Draper Jr. was a pioneer of Californiaís venture capital industry. His father, Bill Draper, spearheaded Sutter Hill Ventures and now runs a charitable foundation.

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As a child Tim was competitive and athletic, with an aptitude for math. Becky remembers him sitting at his little desk, calculating the batting averages of everyone on his baseball team.

By the time he enrolled at Stanford University, he was a tall, strapping man-child with a booming baritone voice and the ceaseless exuberance of a golden retriever. He combined boundless optimism with a preternatural tolerance for risk.

Asked about the origins of his sonís personality, Bill Draper took a stab at an explanation, then laughed.

"Weíre not sure where he came from, to be perfectly honest," he said.

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After attending Harvard Business School, Tim Draper took over his fatherís $2 million investment fund in 1985 and grew it into Draper Fisher Jurvetson, one of the top venture firms in the world. He built a vast fortune with smart bets on Hotmail, Skype and Baidu, among other companies.

Draper doesnít discuss his net worth. Reporters typically refer to him as a billionaire, but he does not appear on the Forbes list.

Howard Hartenbaum, a general partner at August Capital, said Draper is a "brave new world" investor who prefers moon shots to incremental progress.

"Tim for years has been looking for a flying car," said Hartenbaum. "Heís not a Ďfaster, better, cheaperí guy."

Draper took a step back from DFJ in 2013 to focus on Six Californias, which so far has cost him $4.9 million; his own seed-stage investment fund, Draper Associates; and his school for entrepreneurs, Draper University of Heroes, which will soon be featured in a reality TV show.

The sabbatical from DFJ has given Draper the opportunity to work more closely with his sons Adam and Billy, who have followed their father into the world of venture capital. Draper and his wife, Melissa, also have two daughters.

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Adam is the founder of Boost VC, a business accelerator located in Hero City, an incubator thatís part of Draper University and shares the schoolís superhero theme. Boost provides investment and logistical support for startups and is currently focusing on bitcoin-related companies. Tim is one of the worldís leading bitcoin investors and proselytizers.

Billy is an investor at Draper Associates, also based in Hero City.

Jesse, the elder of Draperís daughters, is plugged into Silicon Valley as the host of "The Valley Girl Show." The irreverent talk show, which has snared big-name guests like Eric Schmidt and Elon Musk, was recently picked up by KPIX, the Bay Area CBS affiliate.

Working at Draper Associates, Billy has watched his father create an ingenious pipeline. Draper University is a magnet that draws aspiring entrepreneurs from around the world for an intense, often zany seven-week curriculum dreamed up by Draper. The graduates with the most promising ideas might wind up at Boost or Hero City. The businesses that get off the ground could get funded by Draper Associates and then DFJ.

"I think his grand master plan is to have every step of the funnel," said Billy, 26. "You see a lot of venture capitalists move upstream over time, because they want to write bigger checks and manage more money. But my dad has always gotten a real kick out of the early stage, just a passionate guy or girl whoís sweating, trying to solve a problem. I think thatís kind of what gets him out of bed."

One of Draperís other passions is his evolving political philosophy, reflected in Six Californias, that foresees states and even nations being forced to compete for their citizens.

"We need choices of government," Draper said matter-of-factly, "just like we have choices of tables or chairs or cellphones or coffee."

Draperís vision has generated fierce criticism. Larry Gerston, professor emeritus of political science at San Jose State, said he is "dumbfounded" by Six Californias, which he considers a waste of time and energy. Former Assembly Speaker Fabian Nunez, chairman of a committee opposing Six Californias, sounded equally perplexed.

"I think heís well-intentioned," Nunez said, "but as the saying goes, the road to hell is paved with good intentions."

True to form, Draper is completely unfazed by the derision Six Californias has generated and his failure to collect enough signatures last year to qualify the initiative for the 2016 ballot. His team is investigating whether election workers improperly disqualified any of the campaignís signatures, though the odds of that tactic working are slim, and he may gather a new round of signatures next year, if necessary.

"Instead of letting any of it take me down," Draper said, "Iím just saying, ĎOK, now what? Where do we go now?í And I think that feels better. I think that may be why Iím happy."

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Draperís public image is dominated by his eccentric behavior. Thatís what happens when you run a school where graduation involves bouncing off a trampoline into a pile of beanbags.

But his antics overshadow other parts of his personality, friends and family members say, like loyalty and generosity. When he learned one December day that the son of a childhood friend had fallen ill, Draper showed up at the hospital within hours dressed as Santa Claus. He is known for thoughtful, sometimes homemade gifts.

Heidi Roizen, who met Draper when they were freshmen at Stanford and recently joined Draper Fisher Jurvetson as operating partner, said he has warbled songs and written poems for her on birthdays and other special occasions.

"Heís just a spark of light," Roizen said. "I donít necessarily agree with everything he does. But I just think the world is so much better off with a Tim in it."

That there is still a Tim Draper for the world to admire or mock is a minor miracle. His personal risk-taking borders on recklessness. Draperís numerous brushes with death include at least three near-drownings and a terrifying sprint from a Cape buffalo that chased him behind a small tree before losing interest.

One incident etched in family lore is the time about 15 years ago when Draper ran a speeding boat aground near Fire Island in New York. His father was thrown into an anchor door in the bow and knocked unconscious. Bill Draper said he was never mad at his son for almost killing him.

"I have a hard time getting upset with Tim," the elder Draper said with a smile. "Heís just too much fun."

 

 


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