Tim Draper picks the best possible moment to raise his new fund inside his family’s 40 year old investment brand
As we reported weeks ago, the first quarter of 2016 was the headiest market for venture capitalists raising cash to replenish their own coffers that we’ve seen in years.
So no better time for the Valley’s own version of Donald Trump, Tim Draper, to throw his hat into the ring and raise a new fund.
TechCrunch reported yesterday that Draper -- who claimed he wasn’t leaving DFJ permanently when he skipped being a partner in its last fund-- has indeed decided to raise his own new fund separate from DFJ. He’s using the brand Draper Associates, which TechCrunch describes as a personal investment vehicle for Draper, but has actually been used widely by the Draper family in the past, including its patriarch Bill Draper. My memory is that it was Draper Associates that did the investment in Zappos, for instance, although I couldn’t find a record on that online. Crunchbase itself says the vehicle has been around since 1969.
So Draper isn’t really raising a new fund. He’s slotting his son and the CEO of his incubator Hero City into a vehicle his family already painstakingly built. That’s the Drapers. Last year Dan Raile detailed at length the intergenerational, continual propping up of the Drapers among other Drapers, in the process changing a once proud Silicon Valley dynasty that helped create the venture capital industry to bizarre semi-successful reality TV family.
Sure, Tim Draper invested in Skype, HotMail, and SpaceX as part of DFJ. He’ll always have money from those and many other deals, and those bona fides to his name. But his Draper University/ HeroCity/ reality show second act have been mixed and bizarre. At DFJ, Draper always rankled the feathers of the Valley establishment by being one of the first firms to advertise, and adopting an affiliate model of franchises around the world, and even an ill-fated “MeVC” vehicle for everyday people to become VCs. Ideas that yes, may have been ahead of their time, if you look at the brand-crazed blogging and Tweeting of partners now and the existence of AngelList.
But with Tim Draper, it’s always about execution. And without his partners to mellow him, Draper on his own has been even stranger and more polarizing to the Valley establishment.
To wit: Draper University and Hero City simply haven’t been producing a single big hit, in an age of Y Combinator domination.
If you watched his reality show StartupU, you were one of the few, and you can see why. The program puts “students” through strange and embarrassing camp-like trust exercises instead of encouraging them to work on their businesses. The “prize” of a Draper investment with horrible terms was given to a guy who claimed he could 3D print houses, and “demoed” that by piping some concrete into the shape of a D. Either his reality TV shtick was play-acting in attempt to create a broader media brand-- which backfired-- or that’s really what Draper thinks makes for a good investment.
Lucky for Draper, there’s plenty of dumb money around the world that want to park some of it with any Silicon Valley brand who’ll take it. And thanks to his family, Draper Associates has a track record.