With 115,786 Twitter followers, Tim Draper (62) is not just any businessman. It does not take long for any of your unusual suggestions to surprise you in the world of investment and politics. Last year he launched a controversial campaign to divide the state of California into three parts in order to make it more efficient, a crusade in which, according to calculations, he spent more than 1.2 million dollars, which would be voted on in November, but that finally was left out by decision of the Supreme Court. His ideas may sometimes seem extravagant, but he manages to conquer followers.
His role in Latin America
In Chile he was last week as the host of the Draper Summit, a global venture capital conference that brings together more than 25 venture capital funds that make up his Draper Venture Network, which he does every year and which he chose as headquarters in 2019 to our country and Argentina. Here, in addition to participating in the meeting, he visited President Sebastián Piñera and in Argentina he met with Mauricio Macri, to whom he suggested changing the Argentine peso for bitcoins to revitalize the economy.
Considered the guru of venture capital, Draper comes from a family of venture capitalists, but has managed to make his own way, and fame, through early investments in companies such as Hotmail, Tesla and Skype. Thanks to his extensive network of funds throughout the world, Draper travels constantly in search of opportunities. His philosophy is that just as talents are spread evenly throughout society, good ideas and winning startups are also spread evenly across the globe.
Of course, you have a clinical eye to choose where you put your money. “We support innovators and innovations that are truly disruptive and have a global impact. We do not seek gradual improvements or merely local concepts. We transform industries and markets of trillions of dollars and, for that reason, the ideas we support must be great, and often they often seem crazy at first. We refer to industries such as health, transport, financial markets, among others”, says Capital.
Europe and Theranos
Draper’s enthusiasm spreads. With a smile from ear to ear, the employer seems never to tire. He takes time to take pictures, talk to each person who approaches him and loves to tell anecdotes. Among them, that of his long friendship with President Sebastián Piñera. They have known each other for decades, and even at some time, when Piñera traveled to California, he stayed at the house of the American businessman. “He went with his wife and they stayed in a mattress in the living room of my house. Of course, at that time he was just a senator”, Draper said, laughing as he passed through Santiago.
An absolute defender of bitcoin, Draper is one of the world’s leading investors in the virtual currency and he is convinced that in a few years it will be possible to buy a coffee with cryptocurrencies almost anywhere in the world. Your investments rarely go with the flow. In fact, while the European economies are suffering and the Brexit has the European Union in suspense, Draper tweeted a few days ago: “Europe can be a hot spot for venture capital in the coming years. Governments seem to be actively competing with each other for entrepreneurs, capital and businesses around the world. Exciting times! ”
Draper’s investment decisions are rarely shared. One of the most controversial chapters was his early bet in Theranos, the health technology company created by Elizabeth Holmes that promised with a single puncture to have a complete medical diagnosis. Draper was one of the capitalists who invested nearly 900 million dollars in the company of the charismatic entrepreneur, who became the first woman in the Forbes ranking to achieve a fortune of more than a billion dollars, and who fell into disgrace after Numerous complaints earned him a fraud suit from the SEC, which ended with his signature closing in 2018. The story, which is now part of the True Blood book and HBO’s brand new documentary The Inventor: Out of Blood in Silicon Valley, had Draper as one of its protagonists, who has been one of the few to insist on the innocence of Holmes. “I have always believed in innocence until proven otherwise. She is an entrepreneur, her mission was to change the medical care as we know it, to make it an easier system, and she was doing a very good job. But then she got the attack, and it was what she produced, that I think she was not ready”, he said about the case.
Level the court
What is your interest in Chile? Why did you choose this country to hold your global meeting this year?
Through Manutara (see box) we have internalized a fascinating entrepreneurial talent and government support aimed at fostering the Chilean ecosystem. Our idea was to bring our global network of funds to witness in first person the opportunities, undertakings and achievements that have been achieved in the last time.
Is it your first time in the country? What impression did this visit leave?
I was here 20 years ago and I am surprised at the progress that has been made. Chile has achieved an impressive modernization both in terms of infrastructure and mentality of its people. I had the opportunity to also meet with President Piñera, whom I have known for a few decades, and he told me about the efforts the country has made to achieve this level of development and modernization through public policies, and a joint effort between the public sector and private initiative. For entrepreneurs, programs such as Start-Up Chile and successful regulatory changes have made it possible to reduce bureaucracy and level the playing field so that talent can emerge more easily. In addition, the fact that pension funds can invest in venture capital can generate an impact as powerful as it did in the United States, when these and institutional investors began to bet on this asset class. Chile, in many ways, is an example for Latin America and today is in a unique position, not only to serve its local market, but to transform itself at least into a regional reference.
How do you see the development of entrepreneurship in Latin America?
-Latin America has been a victim of populist governments and other characteristics that throughout its history have not adequately served its citizens and economies, making them victims of those same politicians. With the implementation of digital currencies such as bitcoin, which can not be manipulated by governments, would allow people to really own their money, protect themselves from unbridled inflation, be able to migrate and start in a new place, without having to Starting from scratch or losing the result of years of effort. Latin America could definitely benefit from digital currencies.
The turn and the bitcoins
How do you see that risk capital has evolved in the world in recent years?
I have been traveling the world for the last forty years and promoting entrepreneurship and entrepreneurship or risk capital, as they call it here. I was in China in the 80s, when it was still an underdeveloped country, very different from what it is today, where nobody imagined private entities, much less ventures or startups flourishing. Soon we invested in Baidu, the “Google” of China, just as we did before with a couple of Indian entrepreneurs who were in the United States and who later founded Hotmail, or with a couple of European entrepreneurs who turned out to be the founders from Skype. Now it’s the turn of Latin America.
Anyway, who do you think will lead venture capital in the next ten years: United States or China?
China has recently taken a couple of decisions in the wrong direction, such as restricting the mobility of capital, particularly outward investments, and banning bitcoin and other digital currencies. If they do not correct the course and open up more to external innovation, they will not be able to keep pace with the speed of change and innovations coming from the US. and other countries.
Do you think it is strictly necessary today to go to Silicon Valley or New York to raise money? I ask this because, as a result of the sale of some Chilean enterprises, this debate has risen strongly in the country.
-Today is no longer necessary. Now you have capital and sophisticated investors practically in any technological hub on a global level. Through our global network of funds, Draper Venture Network, we have been able to identify venture capital funds from all corners of the globe, connecting them with each other and even with Silicon Valley when necessary.
Did you ever think about engaging in politics?
I believe that in today’s world, entrepreneurs can have an impact greater than that of politicians and that is why I support the former. However, I have pushed several initiatives, such as “the three California” and the voucher for schools, which I believe can contribute and help resolve the inefficiencies of our state in several areas. In the future, as the population becomes more global, mobile and increasingly diffuse borders, governments will have to compete for their citizens and that is the mentality that I want to spread to politicians.
In a recent interview he predicted that by 2021 it will be common to use bitcoins to buy a coffee. On what is that projection based?
Digital currencies are easier to use, less expensive and safer than current money. We are already seeing the revolution in mobile payments at a global level, so much of the infrastructure is already available and consumers are going to push the trade to join this trend. With a digital currency, one could perfectly buy a coffee at any Starbucks in the world and avoid the absurd transaction fees, the problems of exchange rate and inflation, and other points of friction that we have with banks and financial institutions.