Draper’s Professional Background
I run Draper Associates, the Premiere startup venture firm. We have been a seed investor in about 50 companies that have become unicorns including Tesla, SpaceX, Baidu, Skype, Twitch, Cruise, Coinbase and Robinhood. We also were the first venture capitalist to buy any Bitcoin.
Leveraging Data and Analytics
We use data for everything now, from deal sourcing to due diligence, to post-investment support. We evaluate a universe of 250,000 companies on their quality of people, size of market and uniqueness of technology. Once we evaluate a company, we look for competitors through our LLM Agent. We then diligence the company through a proprietary screening process. After we fund a company, we issue AI press releases with my digital twin.
“Open up to opportunities presented by customers. Love your customers. Make your customers your sales force. Anticipate and drive change.”
Strategies for Adaptability and Resilience
Startups can always adapt. It is the big companies that have a hard time turning the ship around. But startups must have an awareness of the technologies and market trends that might be affecting their industries and their customers. At Draper Associates, we are constantly taking new technologies and innovating our business around them and alerting our portfolio startups of changes that might affect them.
Challenges in Early-Stage Startups
Raising capital is number one! An entrepreneur should spend 50% of his/her time raising capital until the company is cash flow positive and then it can drop to 20% of their time.
The customer is number one! An entrepreneur should spend 50% of his/her time evaluating the customer’s needs and deciding what product or service to provide next.
The rest of the entrepreneur’s time (about 50%) should be spent on building his/her team and making the company run like a well-oiled machine.
The Future of Venture Capital
The venture capital industry has continued to evolve and grow relatively unhindered by technologies, disruptions and regulations, but our investee companies are all affected by all those landscape changes. Software, the internet, Bitcoin and artificial intelligence are major themes that have rocked the world of the VCs. We continue to be whipsawed by new technologies and unique opportunities that will re-map our world.
Advice for Aspiring Professionals
Perseverance is the best model for success. Choose a trajectory that you want to go after for life. Open up to opportunities presented by customers. Love your customers. Make your customers your sales force. Anticipate and drive change. Don’t let change side-swipe you and leave you befuddled. Drive the change you want forward and adapt to the changing environment. Life will throw you curveballs too. Drive forward and enjoy the ride.
