In 1985, Tim Draper founded DFJ — now one of the most famous venture companies in the San Francisco Bay, which at one time invested in Skype, Tesla and Twitter. At the same time, Draper is not among the traditional venture capitalists: unlike most «colleagues», he is a big fan of bitcoin and blockade.
Draper became interested in digital currencies back in 2002, when he met a man from South Korea who wanted to buy his son a virtual sword for his birthday. Draper remembers:
Everyone in South Korea played this virtual game. He was going to pay real money to buy virtual currency, and then buy a few pixels on the screen in the form of a sword. Then I began to think that with virtual currencies something can turn out.
In an interview with Fortune, Draper discussed investing in bitcoin, the departure of Steve Jurvetson, and talked about missed projects, which he regrets most.
— Crypto-currencies and block cattle are on hearing today. As you know, you have made a number of investments in this area. In 2014, you bought 30,000 bitcoins from the US government — these coins were seized after the closure of the Darkkarket Silk Road. Why did you do this?
«Long before buying the bitcoins left from Silk Road, I paid $ 250,000 for 40,000 bitcoins. These coins were on the Mt. Gox. Then Mt. Gox lost or stolen them, depending on how you look at it. When this happened, I just threw up my hands and thought what kind of nonsense this was. How is the largest (at that time) exchange can lose all the money — or still steal them? So I decided that it was over.
I was disappointed with the loss of 40,000 bitcoins, but when the Silk Road auction began, I thought, «Maybe it’s a chance for me to take part in it again.» The people who participated in the auction thought they would get bitcoins, because there were a lot of bitcoins, but I offered the price much higher than the market price and got them all.
— In Davos, US Treasury Secretary Stephen Mnuchin said that his number one goal is to prevent the use of crypto currency in illegal activities. What do you think about this statement?
— It is interesting that the US Marshals Service is much easier to catch the criminals who use the block, in comparison with those who use cash, because the block is the ideal registry. They will not be caught on the very theft, but they will be caught when they try to spend money. Blocks get a mark when something illegal happens to them. Criminals may not know anything about this, but as soon as traffic is noticed in the detachment, they will be caught.
I really think that bitcoin is safer for all of us and is protected from criminals who are used to using dollars. I know what people thought two or three years ago: they were troubled by the nasty atmosphere around bitcoin, but now we think that in reality it’s easier to catch criminals in a detached unit compared to those who use dollars.
— You were one of the first Americans to become e-residents of Estonia. Do you consider the possibility of obtaining citizenship over time?
«I think that geographic boundaries are eroding, we can already freely move around the world, and people from many other countries too. We can choose the country, state and city, which will suit us.
Estonia was the first, but other countries now also create electronic governments that take on many of the functions of traditional governments. Many things can be done virtually: storing data about citizens, redistributing income, health insurance, social security and well-being … Much of this can be done on the blockbuster. And all this challenges our ideas about what a government is.
As Estonia starts to provide more such services, they can capture an increasing and larger share of the global market. Think about it! If Estonia starts to offer a better health insurance plan than the US, we simply say: «Oh, why do not we use it?» Or, for example, a more effective way to ensure the well-being of citizens …
Control brings poverty, while freedom brings prosperity and wealth. We are in a very good position, because we have a democracy and we are adopting new ways of thinking. We are more inclined to adopt new technologies, introducing them and transforming the work of the government. I think that the US is well prepared for this.
As an investor for the next 10 years, I will keep track of what is being done for the government on the detachment and what is useful is done for bitcoin. This is the beginning of something more: in my whole life I have not seen anything like it.
— Are there any investments that you have not made and still regret it?
— I discussed investing in Google. I was sitting with Sergey Brin on a plane, and he explained in detail to me the idea, from which I was just delighted. But the partners said that in our portfolio there are already six search engines and in others there is no sense. I said, «I really like these guys, and the name is pretty,» but that was not enough.
We also missed Facebook. My daughter was a big fan of Facebook, and I knew that it was something special, but after making a number of bets, we quit the game, because our bets were not high enough. They started with an estimate of $ 20 million and rose to $ 115 million — that’s when we jumped off. Then we lost, and it was a complete bummer.
And then for other reasons we missed Airbnb and Uber. So yes, I missed everything.
— Ilon Max appears on the news daily. You know him well. Is there something that most people do not know about him?
— I think that his management style is really unique. He shares with people a science-fiction vision. He says: «We’re going to Mars.» And he is ready to accept all criticism from people who think he is crazy. But then, going to Mars, he will take all the best engineers in the world and invite them to work for him.
I want all entrepreneurs to think so — they took the first step and were not afraid to say «we will cure cancer,» «we fly to Mars» or «we will change the government.» I want them to do this, then their missions will attract people’s attention.
— DFJ went through difficult months (partner Steve Jurvetson was dismissed, and after that, accusations were made against a DFJ in a sex party at one of the events). There are different versions, and I would like to hear from you about what is happening.
«As for me, I started managing Draper Associates and spend most of my time in San Mateo.» I’m still one of the leaders of DFJ, so what’s going on affects me, too, because I’m running the company. But the money I manage is now in Draper Associates.
Yurvetson was a wonderful partner and just a good guy, he worked with us for so many years. It was an honor for me to work with him, and the DFJ partners cope with the information tsunami as well as possible in the current situation.
— But you were co-founders. How do you personally and the company cope after his departure?
— Over the years, we are used to the turmoil that occurs when investing in the most advanced things in a very volatile financial world. Difficulties are inevitable. This is a great race, and it continues.