All right. Hi everybody. Good to see you all. Wow, we're already at like 400 people and I hit the start button two seconds ago. Uh obviously Tim, you are popular. I think this is going to be our largest uh single event in history. We had um thousands of people register across the different systems. Of course, how many of them show up is a different story. But uh you've clearly made a dent on the universe in a positive way. I'm really honored to have you here and uh thanks for making it out this morning.
Good. My pleasure. It's going to be fun.
Ado is what you're I mean we're we're I get one of the most creative guys on the earth asking me questions. I think that's a pretty good that'll be a pretty good start.
Well, I appreciate that. You know, I'm also hardworking in venture and entrepreneurship. Um, I know like it's been a great time for you. Let's just dive right into like SpaceX because I think that's going to inform a lot of other interesting questions I have for you. Right. Um, you recently recorded a video. I watched it. It was awesome where you sang your wristmaster song slightly adapted uh for Elon. And maybe we could put a link into the chat about that.
I don't think these guys want to hear that.
It was pretty good. It was funny because you do the tour going in, right, to the famous uh concert hall and then you're in the recording studio.
Oh, great. You saw that? I didn't know we had released that. That's great. It's a little off. The video is a little off on the audio. I told them they got to clean that up. But I'm glad it got out to somebody.
Well, I enjoyed it and it was really like it's so funny. You know, if I sing in the car or in the shower, I think, 'Oh boy, I'm hitting it just right.' And then you get to the studio, you get clamped up, you're nervous, you know, it's never quite what you hope it to be. And then you realize you're not hitting any of the notes. So what I did was I just didn't hit the notes too well, but I just made it I owned it. It was like I'm just gonna do this and I'm going to hit whatever notes I want to hit.
Everybody should try that, by the way. Go into a studio and record a song. It is the most fun.
And we got we had the greatest band. We had an amazing band in Nashville and uh in the studio and they were fantastic. They've just So, you recorded the song not necessarily just to record the song, but to celebrate this journey you've been on with SpaceX for two decades, right? And you know what's really kind of fun is the song was written long before I found I funded Elon. And what happened was when I listened to the song, I thought, 'Oh my god, this is all about Elon.' The whole song. I mean, I even used the word astronautic, you know, I couldn't believe it. You know, he had he's going public all everything everything hit him. Every it was just exactly boy, that guy, he's a hero. He's been through so much. He has he has laid it all on the line over and over and over and uh wow that I mean it's a combination of his you know genius but his risk tolerance is unbelievable. Iron will. Yeah, and he kind of has it in his mind we got to be multi-planetary and that you know he got all he got involved and sort of saved Tesla. Um, and when he did, yeah, he kind of turned it all around, made it all happen. And uh and I thought he was sort of on the planet to sort of save this planet, but no, he's on the planet to get us a backup plan. So, really amazing. It was. Yeah.
And that was 20 years ago, you know, when we first funded Elon and 21 years a Well, actually Tesla was even longer ago than that. And before that, we tried to fund him at X.com and we tried to um also fund uh Confinity, which merged with X.com. Uh and those didn't um we weren't able to do it then. Uh but we kept good relations and it was Steve Jervson who really um kept good relations with him as we um as our world developed. Um
Yeah, and I want to so probably one of the better investments of all time I could safely say and I'm curious like just ballparking it what was the rough multiple on that? I mean it's got to be insane, right? Like, yeah, I think I mean it was a long time ago, but I think we paid a $200 million valuation. Um, and Elon had already put a hundred million of his own money into the company.
Well, those weren't the numbers I remember. Those are numbers Steve remembers. And Steve has a better memory than I do.
Well, it's a long time ago. And so I think it was 200 million and we um and you know that's it's many X but uh but there's dilution along the way as SpaceX did take in a lot of money along the way and um and I know the guys at DFJ Growth have been um have continued to back SpaceX all the way along. So that you know this is you know it it really a lot of things come together with our with the SpaceX IPO.
Yeah. So I mean it's got to be it's it must have been I mean it's [clears throat] it's a 10,000 multiple assuming no delusion.
So it's definitely in the thousands. Yeah, we've had a few I've had a few of those. Robin Hood was like that.
And Bitcoin on my original purchases was well higher than that.
This one's a little weird because you held it so long, right? and and I'd like to, you know,
You know, that was, hey, I don't know if we would have, you know, with Tesla, you know, I I remember going to all the hobby hobbyists and trying to figure out which electric car company I wanted to back because when I first got into an electric car, I just went, 'Oh my god, this is so cool.' Yeah. Um and uh and that one went public, you know, at a reasonable, you know, we we thought, 'Oh, great. It's it worked, you know, and we distributed really early because it was public pretty early.' And when you distribute it, that's the way it is. That's where it goes. And uh and in this case, Elon kept it private. And so as a backer, you're you're going, 'Yeah, this is great.' And it keeps going up and everything's really fun, but as you know, listening to LPS, the LPs are going, 'Hey, hey, hey, hey, we got this problem.' And there was um we did do one thing which was kind of interesting. Um, and I give credit to uh John Fischer and Randy Glind for this. Um the LPS were starting to get a little anxious because um SpaceX was tradable. And so what they did was one of these extension funds where they let in they let new investors come take out old investors uh in this I guess they called it a continuation fund.
Continuation fund. Yeah. Yeah. And uh that ended up working out well because then everybody was kind of on board. They were all happy they
Right. So if you want to get out you can if you wanted to get out there was an opportunity for you after about 15 years or something and then uh or maybe 16 years u
Which is a long time. You you've been speaking of which right you brought up some great investors Jervson I know Jed Catz your family uh you've been really a VC whisperer for most of your career right you yourself come from a line of VCs you've helped so many great VCs get off the ground um I guess what my question for you is like why are you so passionate about venture capital.
Um, you know, I see what it does for the world and the world economy. There's something when you um if you put a business plan competition together, it attracts all of this imagination and creativity and um and people who want to do something with their life and they come and if you do it at a college or something, it's just magical. These are people who were kind of lost in academia and then they go what I can, you know, I can start a business and somebody can fund it and we can get going. we can do what we want to do by the electron microscope or do you know whatever it is they're trying to do and their imaginations run wild and that has worked all over the world and I felt like my mission in life was to spread because I grew up here and I got to see what it did for the Silicon Valley. It took this place that was very rural when I grew up here.
Wow. And uh and it and it turned into this really um a a flywheel or a snowball that just kept growing because people people went from you know hey this can you know good engineer can kind of create something interesting to hey I think I can make a better whatever and I think that has happened throughout the Silicon Valley and it's really I mean now the Silicon Valley it so rich because all these people have done such amazing things here. Well,
I had made it my mission to spread venture capital and entrepreneurship around the world. And that's and then, you know, that's kind of why I've gotten involved in, you know, trying to save California from itself and try to, you know, I went around met every time I'd go to a new country, I'd say, I have to meet the president or the prime minister because I want them to be thinking freedom. Because if you're in a socialist environment, the government tells everybody what to do and they all have to do it. And that's sort of it's a you know, nobody imaginations go blank. And if you're in a free environment and you can speak freely and talk freely and say whatever you want even if offends people uh then you can imagine anything and all of a sudden that imagination starts really rolling and great things start to happen and uh and so if people are living in fear uh they are and that's usually under socialism because they kind of cramp down on everything, their regulations about everything. They tell everybody what they're, you know, God, in Russia, they were saying you're a ballerina, you're a, you know, whatever. Um, in so in a socialist environment, you are afraid to think. You're afraid to explore and think. I felt it a little during the pandemic. I thought, whoa, you know, everybody's telling me what I'm allowed to say and, you know, stay six feet away and blah blah. And I thought, this sucks. And then, you know, once that pandemic was over, we were free again. And boy, the imaginations of people have really rocked. Um,
That's interesting. You know, I have a good friend who grew up in the GDPR in the West or East Germany, and he he's like, 'When when I was young, if you saw a line, you would just get in it.' Like, you know, it's like kind of a weird mental like I I see a line, I'm like, I I don't want to work.
That's right. There may be bread there. There may be milk, fruit.
Yeah, exactly. Maybe food stuffs. Um, I have so many questions about venture, but you open this door and you've been fortunate to see around a lot of corners to back a lot of crazy ideas and you've whether it be the internet, right, crypto space with Elon and and how do you like you have never really at least from the outside, you've never really fallen for this crazy idea trap. Oh, that's a crazy idea. like I can't back it. You've seemed not to get that condition, if you will. How do you do it? Like, and you continue to do it, right? Like, this isn't something that you did once 20 years ago. You've consistently avoided this crazy idea trap throughout your whole career. And I'd love to hear any insights you have on how you
I think um confidence builds as you see crazy ideas become real. and they become a big part. So I have become I had that in my head when I got started but it has um the momentum continues because uh that is actually where we've made all of our great successes in things where people there was always the oh there hasn't been a successful car company for 50 years or you know those two guys those two Skype guys they were a kaz Zah and they're they're wanted here in the US. the the um you know why would you um back any company that gives away something for free which was hotmail you know and then u and then SpaceX space are you kidding me that's government government does space you know you don't do space you're that's well and then the Bitcoin was like oh it's just funny money whoa hey cat, it's monopoly money. What's it what are you thinking? What? And uh but if of course you do the research, you go, 'Oh, currencies have gone through many evolutions and better technologies always seem to win out in the end.' Um so it has uh encouraged me to do it more and more and more. But also seeing the outcomes of some of these companies has made me feel like wow I you know I got to work harder. This is really important. This is doing extraordinary things for the world. I have to work harder. And so going and you know I meet entrepreneurs all over the world. I have that the show, Meet the Drapers, to attract entrepreneurs to uh to a um a show. Now there thousands of people who apply for every person who gets on. It used to be like I'd grab anybody I could show. Um there's the school which is also attracting uh really high quality talent and uh
Draper University. Yeah. And uh and so and then we have set up business plans in a lot of different areas, different uh the the data science uh business plan competition at UT San Antonio, the female um le entrepreneurs at Smith College. We um did that for 10 years. Uh uh Wharton Business School, University of Utah Business School. Um anyway, we we put together business Oh, um the my daughter has put together the Anderson School um in LA business competition and and the um and what happens is what we're really doing is we're scouring the earth and we're saying, 'Hey, entrepreneurs or even would be entrepreneurs, you know, come see Draper, see what happens. you know, maybe maybe we'll start something and if you start enough then you end up with a SpaceX and a Tesla and a Bitcoin and Robin.
I've had you as an investor in a few different things and I can safely say to the few hundred people or thousand people live and thousands that will watch, you've been one of the best investors I've had throughout my career. Full stop.
Thank you. Yeah. No drama. I've never had any drama with you. You've always been supportive and thoughtful and if anyone here has the chance to work with Tim, uh you should be so lucky, right? That's my humble opinion. Um I want to go back though because you said you feel empowered or pushed to work harder, right? And you know, you've been at it a long time. You've had enormous amounts of success. You know, it's kind of almost like a lot antithetical to what a lot of people think, right? A lot of people think, 'Oh, I'm gonna get successful. I'm gonna have my yacht like, you know, have all the fan with the feeding of the grapes or whatever.' And you're like, 'No, I want to work harder.' And it's we need more role models like that. But sure to talk to me like how do you view success? Is your view of success like I want to do more or is it the monetary side? Because it's very interesting that you feel compelled to do more right now. You know, I I want to leave it all on the field and I've had some health risks and uh I think they've also encouraged me to make sure I get it all done, you know, make sure that it goes goes go. Great thing is I've got three venture capital kids. I have four kids, but I have three venture capital kids. And
And they're doing great, by the way, as well. Also,
They are really hitting it. Billy with path, uh, Jesse with Halogen, and Adam with Boost. [snorts] um they have uh well they grew up at our dinner table and you know I'd come home and I'd take apart a computer and I'd say or I'd ask what hey what do you think of this Facebook thing you know I'd get them kind of thinking that way. Um actually my daughter Jesse actually brought me Facebook and pushed but uh and I got out bid. I did bid but I got out bid. Um [clears throat] there was another big mistake. You know that you know you really you don't I never worry too much about the losers. I worry a lot more about the winners I miss. So that was one. Um, so I feel like part of it is, you know, I've got to leave it all in the field and part of it is I um I want to make sure that uh the next generation is doing it very well too. And that's why you say, you know, I've, you know, trained many venture capitalists. I have. I mean, it wasn't really my intention to train venture capitalists inside my organization who would then go out and do their own thing. But now I look back and I go, that was exactly what I should have been doing. You know, it's you create an ecosystem. you create a a a network that is uh extraordinary because venture capitalists themselves have lot big networks and if you have networks outside of your networks gets pretty big right and they a lot of them every venture capitalist that I know that work with you and I'm friends with Steve Jed lots they all think the world of you in fact Jed was like oh I have so many questions for Tim. [laughter] You can ask.
Is he on? Do we have Jed on here?
No, he might be actually. He might be watching. Jed, raise your hand if you're watching. But no, he uh that wasn't Jed, but someone else raised their hand. But yeah, he came I had dinner with him the other night. He's like, 'Oh, you're interviewing Tim.' Everyone leaves with like this great impression, myself included. I want to just go back to Facebook for one second because you know this is a I've heard a lot of great VCs say uh they were scared to pay a valuation or were outbid and they look back and they think that was dumb. I'd like to hear like maybe a more detailed take on that from you in
I can tell you the whole story.
I can tell you the whole story. Um we um Facebook was already profitable. Uh they had not taken any money. Uh they were growing super fast and uh and I um uh Sean Parker. Sean Parker. Yeah. Uh came to me and said, you know, told me all about Facebook. he was the one out um pushing it and uh and I said um he said well you would you do a $20 million valuation and at that time you know that was a pretty big number for us although they were already doing 4 million in revenue and I said u sure and then he comes back and he goes I'm sorry, it's going to have to be 40. And I said, 'Okay, I'll do 40.' And then he comes back about a week later and he goes, 'I'm sorry, it's going to have to be 80.' And I said, you know, I struggled for a while. I went back to my partners and I said, 'Okay, we'll do 80.' And then he comes back a week later and he says, 'It's gonna have to be 115 million.' And I said, 'Can't do it.' Biggest mistake ever. But anyway, I said, 'I can't do it.' Then it turns out that it was uh Teresa Ga who was on the other side of this deal. Like she was negotiating against me and we I told her about it. [laughter] We were in the same board meeting. We were in a board together and I um and I said, 'Hey, I'm looking at Facebook, you know, is that something that seems interesting to you?' And uh and she, you know, I don't know, we had some conversation about Facebook. And then it turned out that it was those guys that just kept negotiating with the other side. And she I think she knew I was on the other side of it. She could have just called and we could have like split the deal or something, but no, they took the whole thing and wow, more power to them. They fantastic.
DC can be a little sharp elbowy at times, you know. Um
Well, yeah, back then it was a little more uh chummy. It got sharper elbows as fund sizes got bigger.
That's for sure. Okay, I got two more. There's so many questions in the Q&A. Um, I got two quick ones for you. One of them's from Chad, actually. Uh, so the I'd love to hear your feelings on AI. Are we Is it bigger than the internet? Are we in some sort of bubble? And like I'm not asking this because I'm just like genuinely interested in what you think and not like an answer because you have a different view on a lot of things than most investors do which is part of the reason why you've had such great success.
Yeah. I'm going to draw a little picture for you. Uh
Okay. This is what happened. I don't know. Can you guys see that?
Yeah, we can see it. This is what happens to every industry. Wait. Yeah. Okay.
Um, and I call it the Draper is curve, but I'm just branding it because it happens to every industry. So, it goes and it get everybody gets very excited about it and then that's the peak of the hype and then it comes crashing down. People kind of go, 'Well, God, I'm not putting my credit card on the internet and this Melissa virus is messing up my Google and blah blah blah. And then for years not much is going on but engineers are working very hard to make it better for you as a customer and then slowly but surely it becomes a part of your life. You don't even notice and then it gets to be bigger than anybody ever imagined. You know it replaces hotels and taxis and all of a sudden you know this is that's what the internet did. Okay. Same thing has happened with Bitcoin. It went 2017 peak of the top then down here and right now all that work is being done and then it's going to start turning because and nobody's going to notice but it'll be a part of our world and it'll be a big huge thing and AI is like still like right here on that curve but uh we're pretty we're getting closer to the top of the hype curve where you're going to see all those, you know, IPOs happen and I think they're going to happen this year. I think that's
And then you're then people are going to go whatever and nothing's going to happen for a while and then pretty soon you're going to have like drones and robots following you around and doing great things for you, picking up burgers or whatever. Um, so I think
I think we will have this because on the internet who [clears throat] were the big internet companies on the way up this hype? They were uh AOL and Yahoo and Netscape and then boom and it comes down and what comes out of that it's Google, Apple, Facebook. Yeah, Twitter you know. Uh and then Airbnb and and uh
