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Ringmaster of the venture capital playground

Timothy C. Draper approaches his work with fun twists, but he has serious tips for the hopeful entrepreneurs at the Florida Venture Forum.

By KRIS HUNDLEY
Published February 8, 2005

What's with the elephant?

Officers of the Florida Venture Forum knew they were in for an unconventional speaker at their recent conference in Orlando when they invited Timothy C. Draper.

Draper, a third-generation venture capitalist and managing partner of Draper Fisher Jurvetson in Menlo Park, Calif., is renowned for his ability to look at the big picture and pick a winner.

He was an early backer of Hotmail and suggested the use of viral marketing via the Web to spread an Internet product. He has set up an international network of Draper affiliates to tap promising startups worldwide. And he is such an ardent supporter of entrepreneurs that he wrote a rock song celebrating their exploits, then had a widely known singer put it to music (more on that later) and sent 5,000 copies to clients for Christmas. On the CD's cover is a photo of Draper, dressed in safari clothes and sitting astride an elephant.

Even so, the venture group's organizers were a bit surprised when they heard Draper might show up in a spacesuit. Instead, he came in regulation suit and tie, though the tie was decorated with spaceships.

While his clothes were quasitraditional, his thinking was anything but as he spun out suggestions about ways in which entrepreneurs might make the world better through wireless power, flying cars or tires that last forever.

By the end of the evening, Draper even had the audience singing along to The Riskmaster , his homage to entrepreneurs everywhere.

Draper responded to questions from th e St. Petersburg Times before his appearance in Orlando:

You only have a couple Florida-based companies in your portfolio. Is there any reason Florida companies fail to appeal to you as investments?

On the contrary, we have had tremendous success with our Florida investments. We were investors in Tradex (Technologies Inc.), which was sold to Ariba, and Redgate, which was sold to AOL. Both returned many times on our investors' money.

Are there any weaknesses that are perennially seen in companies based in the state?

I understand you have more difficult "blue sky" laws than more states. Otherwise, no. Good university system, great governor, large population, nice weather ...

Is it realistic to expect an expansion of Scripps Research to Florida to create spinoffs in the life sciences? And what can the state do to maximize the impact of those spinoffs?

I like the idea of research institutes, although I prefer them to be privately funded. I would suggest events where the researchers have to present (in 30 minutes or less) their progress to business people who might be entrepreneurs and venture capitalists. I would have them work with the local business schools.

You've been active on education issues in the past. If you were governor, what's one step you'd take to improve schools?

As governor, I couldn't do it. As king, however, I would privatize the whole system. A sweeping voucher initiative. I would force schools to compete with one another. I would allow parents to choose the school that was best for their child. School boards would hire and fire principals. Principals would hire and fire teachers. Since I have been alive, anything in the private sector has gotten better: the food, the cars, the computers, the buildings. K-12 education has gotten worse.

There has been an increase in venture funding to later-stage companies. How do seed and early-stage companies compete for funds?

It is a free market. There is usually money if there is a great entrepreneur with a strong vision and a solid model going into a large market. The early companies often need to refine their business models if they want seed funding.

What can be done to encourage entrepreneurship?

Good technical education. Good business schools, and get the two to talk to each other. Business plan competitions are great for the community.

Is it true you're the "mystery rock star" singing on the Christmas CD?

He's our new partner.

--Kris Hundley can be reached at hundley@sptimes.com or 727 892-2996.

[Last modified February 8, 2005, 00:21:16]