From mentor to encryption investment pioneer, how does Tim Draper seize the next technological revolution?

Author: Weilin, PANews

Original Title: The "Enlightener" of Pop Mart's Angel Investor Mai Gang, How Silicon Valley Venture Capitalist Father Tim Draper Bets on Bitcoin and the Next Era

The explosive popularity of the trendy toy brand Pop Mart has made its first angel investor, Mai Gang, a focal point of market discussion once again. In the summer of 2012, just five days after meeting Pop Mart's founder Wang Ning, Mai Gang invested in the company. As the first angel investor of Pop Mart, Mai Gang witnessed its journey from a modest residential house in Beijing to its listing in Hong Kong.

In fact, Maigang's "vision" section benefits from his "enlightener" during his early years studying in the United States - the well-known Silicon Valley venture capitalist Tim Draper. Maigang entered the Chinese venture capital scene in 1998 and co-founded Shanghai Pudong Science and Technology Innovation. After that, he studied in the United States and won first place in a startup competition while studying at UCLA, thus connecting with the godfather of Silicon Valley venture capital, Tim Draper, and entering the Silicon Valley venture capital industry. In 2005, he co-founded the startup incubator VenturesLab with Tim Draper.

Tim Draper is known as the "father of venture capital", and the projects he has invested in have driven some of the most innovative advancements in today's market, including Skype, Baidu, Hotmail, Tesla, and more. At the same time, Tim Draper is also an early and staunch believer in Bitcoin.

Family inheritance and Silicon Valley genes: The continuation of the third-generation investors

Draper comes from a family with a background in venture capital and politics, being the third generation of this family. His father is the founder of Draper & Johnson Investment Company and previously served as the chairman and president of the Export-Import Bank of the United States. In 1994, Draper's father returned to the investment world from public office and co-founded Draper International, the first American VC fund focused on investing in Indian companies.

Tim Draper's grandfather, William Henry Draper Jr., founded the venture capital firm Draper, Gaither and Anderson in 1958, establishing the basic rules of modern VC, including management fees and profit-sharing after the exit of invested companies. Draper's grandfather also served as the first U.S. ambassador to NATO.

In a family with both financial and political backgrounds, Draper exhibited a unique perspective early on. He attended Phillips Academy Andover and then went to Stanford University, where he earned a Bachelor’s degree in Electrical Engineering in 1980. In 1984, he obtained an MBA from Harvard Business School.

In 1985, Tim Draper founded Draper Fisher Jurvetson (DFJ), and later expanded to create several entrepreneurial and entrepreneurship education platforms such as Draper Venture Network and Draper University.

Tim Draper's most famous investment projects include Baidu, Hotmail, Skype, Tesla, SpaceX, AngelList, Twitter, Coinbase, Robinhood, Twitch, and others.

In the early 2000s, when foreign capital was generally withdrawing from China, Draper chose to stay and eventually successfully backed Baidu through DFJ. He is also one of the earliest Silicon Valley figures to enter the Chinese venture capital industry. In 2005, he co-founded "VenturesLab" with Mai Gang and others, becoming an important participant in China's entrepreneurial ecosystem, and in the crypto field, VenturesLab also became an angel investor for OKX.

In 2018, Draper University, founded by Tim Draper, established a base in Zhongguancun, Beijing through a training camp called dCamp in China to cultivate blockchain talents, attracting numerous crypto OGs to participate.

Draper has also invested in several early cryptocurrency projects, such as Ethereum, Coinbase, Ledger, Bancor, Arkham, Ark, Merzo, Propy, and others.

Connecting with Bitcoin: From 40,000 Bitcoins "disappearing" to a firm believer

Nowadays, Tim Draper's investment footprint in the crypto space is everywhere. However, compared to the years from 2014 to 2020, Tim Draper's investments in the crypto field have been less frequent in recent years, as he mainly promotes Bitcoin in public.

Tim Draper's interest in Bitcoin began in 2011, two years after Bitcoin was born. He met CoinLab founder Peter Vincennes through investor Joel Yarmon. CoinLab later became an innovative company focused on Bitcoin and a miner, and was also a partner of the then largest exchange Mt.Gox in the United States. At the time, the concept sounded a bit distant, but he was very interested and made a small investment in the company. Subsequently, Draper asked if he could help him purchase $250,000 worth of Bitcoin. At that time, the price of Bitcoin was about $6 per coin. Peter helped him buy some and stored it in Mt.Gox. Peter also mentioned that he would use part of the money to purchase ASIC high-speed mining chips from the mining machine manufacturer Butterfly Labs to mine more Bitcoin at a lower cost.

Two things happened that caused the "disappearance" of about 40,000 bitcoins that should have been earned. First of all, the shipment of mining chips was delayed. Instead of sending the chip to Peter as promised, Butterfly Labs mined Bitcoin with the chip for several months and didn't ship it until later. And during these months, more miners enter the market, and the probability of mining bitcoin is greatly reduced. By the time Peter finally received the chips, Draper and his partners had already missed out on the best mining window. To make matters worse, Peter kept the bitcoins he mined in a deposit made by Mt. Gox controls the wallet, and these bitcoins eventually change with Mt. Gox was stolen, and he became one of Mentougou's largest creditors.

However, this loss not only did not undermine Draper's confidence, but instead sparked his respect for the resilience of the Bitcoin system—despite experiencing a major theft incident, Bitcoin only fell by about 20% and continued to be actively traded.

Draper realized that the demand for this new type of digital currency is so strong that even in the face of massive theft, it can continue to develop and may even provide us with a whole new way to transact, store value, and transfer funds. The societal demand for Bitcoin is so intense that people are willing to tolerate significant mistakes and fraud just to have such a frictionless, globally accepted currency system.

In 2014, after the US Marshall's Office seized the Bitcoins from Silk Road, they put more than 30,000 of them up for auction. Draper saw this as an opportunity to recover his losses. A total of 31 bidders participated, and each bidder could choose to bid on nine blocks (each containing about 4,000 Bitcoins). At that time, the market price of Bitcoin was $618 each. At the last moment, Draper decided to place a bid above the market price, bidding $632, and as a result, won all nine blocks.

Draper quickly realized that he could do something meaningful with these bitcoins - such as promoting the adoption of bitcoin in developing countries. In these countries, people generally lack confidence in their national currency, often because the government excessively prints money for its own benefit, leading to increased corruption and worsening inflation. Worse still, low-income individuals in these countries are often not accepted by banks, which consider them "unbankable." These individuals are part of the approximately 3 billion global "unbanked," and bitcoin may be their solution.

predicts that Bitcoin will rise to $250,000 by 2025, "Bitcoin will replace the US dollar"

In Tim Draper's view, the advantages of Bitcoin are very clear:

1. It is a globally accepted currency that does not require government intervention;

2. It is a way to preserve value without storing precious metals or artworks;

3. It is a frictionless currency that can automatically circulate according to contracts without the need for explanations and interventions from lawyers or accountants.

He believes that Bitcoin and its underlying technology, blockchain, are the engines driving human progress. The United States wisely refrained from imposing regulations on the internet at the outset, allowing a large number of internet entrepreneurs to establish themselves in the country, ultimately leading to the prosperity of the internet economy. Today, if a similarly "light-touch" approach can be taken with Bitcoin regulation, it will continue to attract innovators to stay in the United States.

In May of this year, Tim Draper repeatedly stated that the dollar is quickly becoming worthless and advocated for Bitcoin as an alternative within a few weeks. He reiterated this point in perhaps the most straightforward way. "The dollar is heading towards extinction," he said on social media platform X, "As the dollar depreciates, people will rush to spend it." In contrast, Draper believes that people will turn to Bitcoin for security.

"Retailers will soon prefer Bitcoin more," he said, "and when that happens, people will start using Bitcoin for spending." His latest statement responds to the renewed debate from Bitcoin financial services company Swan regarding whether "Bitcoin is ultimately a store of value or a medium of exchange."

Draper believes that the widespread adoption of Bitcoin as a payment medium may be achieved sooner. He told CoinDesk in May that he expects Bitcoin to replace the US dollar as the global reserve currency within 10 years. At that time, he even predicted that Bitcoin would have "infinite value compared to the US dollar." However, in the short term, he expects Bitcoin to reach a price of $250,000 by 2025.

One of the reasons Draper is becoming increasingly pessimistic about the US dollar is that the dollar index (DXY) has performed poorly this year, reflecting a decline in market confidence in the dollar. He noted that the weakness of the dollar index is related to global concerns about President Trump's trade policies.

Investment Philosophy: The cycle is set for 5 to 10 years, passion precedes data.

As a venture capitalist, Draper has also summarized his six core investment principles in an external interview.

Don't invest too much money in a single company early on: Draper has seen one of the biggest mistakes many investors make is to "invest too much money in the first few companies they invest in... don't put in as much as you 'think you want to invest' because you may very well run into cash flow issues later on." He recommends only investing half to one-sixth of what you originally planned, as it's likely that this company will need multiple rounds of financing afterward. When the company is doing well, you want to ensure that you still have funds available to continue supporting and encouraging these "winners."

Investment cycles are set for 5 to 10 years: some investments take a long time to pay off, and he advises not to get trapped in projects with overly long cycles. His advice is: "I wouldn't think too far into the future... you should think within a timeframe of 5 to 10 years."

Don't project your entrepreneurial experience onto others: If you're a successful entrepreneur and now start investing in others, it's easy to impose your own experiences and personality onto those seeking funding. He cautions, "You might initially think, 'Hey, I can do it, so can others.' You start throwing money around casually. You assume everyone is like you and can achieve what you've achieved. But that's not the reality. You need to calm down and really think about whether this person is truly willing to make the sacrifices you once made for success."

Focus on the mission, not the money: In the early stages of investment, never start with the mindset of "How much can I earn?" Draper says, "If you started thinking, 'I can make money from this'... then it's better not to do it. You should invest for the mission. If you can truly resonate with the other party's mission, and you say, 'I love this mission, I love the way it will change the world, so I am willing to join,' that kind of investment is much healthier."

Investment should look at "passion", not "data": During a fundraising roadshow, there was once an entrepreneur who started to show him those financial models, and Draper seemed somewhat indifferent and uninterested. The entrepreneur once thought he was losing this potential investor. After a break, he and his partner adjusted their strategy, returned to the meeting room, and began to sincerely talk about their dissatisfaction with the current state of the industry and the changes they hoped their company could bring. When I later mentioned this experience, Draper responded, "You might be right. I'm looking for passion."

Conclusion

To this day, while Bitcoin is still sometimes questioned as a "bubble," Tim Draper has already gone "all in"; while mainstream capital remains cautiously observing Web3, he is already cultivating talent, building infrastructure, and investing in visionaries for the next era. He does not see himself as a speculator, but as a driver of change.

Perhaps in the eyes of Pop Mart investor Mai Gang, Draper is not only an enlightener but also a person who "still ignites a spark in the cold winter of capital."

His actions continue to ferment. Whether Bitcoin will truly replace the US dollar is uncertain, but one thing is for sure: Tim Draper has bet all his investments on that possible world.