FULL TRANSCRIPT
Slava Rubin (00:00)
In this episode of Smart Humans, we talk with the legendary Tim Draper, the VC who's been investing for 40 years. He's been first money in so many companies, including incredible hits like Tesla, SpaceX, Baidu, Skype, Bitcoin, Robinhood, Hotmail, and more. He talks to us about where the market is at, how are public markets priced, where are the opportunities in private markets. Should you be investing into Bitcoin and why he thinks it's possible it can go to infinity?
Slava Rubin (00:56)
Hello and welcome to the latest episode of Smart Humans. I am exceptionally excited for today's guest. I've known him personally for well over a decade. The one and only the legend, Tim Draper, who's founder of Draper VC. So Tim, welcome to the show.
Tim Draper (01:14)
Great, thanks for having me on your show. This is terrific show.
Slava Rubin (01:18)
Yeah, I'm super excited to have you on. You have so much experience investing into so many incredible companies, assets, crazy ideas. Let's dive in. So we always like to start off with how did you even get into this world of alternative investments? You could go back to childhood, college, work, wherever you'd like to start. How did it all even get started?
Tim Draper (01:40)
My grandfather was the first Silicon Valley venture capitalist, and my dad was a pioneer in venture capital. And so I kind of had it in my blood. I had intended to be an entrepreneur, but I kept having new ideas, and they weren't all good. And so instead of just starting one company, I thought,
you know, maybe my dad and my grandpa were right. Maybe that's what we were meant to do. And so as a venture capitalist, I've been able to be slightly an entrepreneur too by creating a school called Draper University of Heroes and creating a TV show that's on YouTube called Meet the Drapers.
Slava Rubin (02:22)
Awesome. was, when do you, if you recall, when did your grandfather start becoming a VC?
Tim Draper (02:28)
1957, he was the first Silicon Valley venture capitalist. There was another venture capitalist. They were both generals in the army, but the other one was named General Doreo, and he was the first venture capitalist on the East Coast. And these guys started about the same time. And my dad actually took General Doreo's course at Harvard Business School, and that's how it all kind of started.
Slava Rubin (02:36)
wow.
Incredible. And did you have an opportunity to have conversations with your grandfather?
Tim Draper (02:58)
Oh, yeah. Yeah, except that they weren't a lot of business conversations. I think he died when I was about 17. But there were some great things that my grandfather passed on to my father and my father passed on to me. One was it doesn't matter who's buying or who's selling. It's all about the human connection. That was one thing. The other thing that he did was he he made a bet with my dad and then my dad made a bet with me.
Slava Rubin (03:06)
Okay.
Tim Draper (03:28)
not to drink or smoke or take drugs until I was 21.
Slava Rubin (03:33)
Sorry, what does that mean a bet? How does that work? Like he was gonna buy you a car or something or how does that work?
Tim Draper (03:35)
If I made
it, yeah, if I made it, I got a trip to Europe. And I was so young when I made the bet, I didn't even know where Europe was or what it was. But I thought, ⁓ okay.
Slava Rubin (03:47)
Wait, I have three
young kids. have a 10, seven, three year olds. I might have to steal this. So do you remember how old you were when you made that bet?
Tim Draper (03:55)
I was five and my sisters were nine and eight.
Slava Rubin (04:00)
And now it was with your grandfather or your father. The bet was with your father or your grandfather.
Tim Draper (04:03)
What's that? With my
father, yeah. My grandfather made it with my father. He made it to 21. My dad made it with me. I made it to 21. Actually, I still don't drink. I chugged a bottle of champagne on my 21st birthday, I really, well, I was done with it by the time I was 22 or 23
Slava Rubin (04:09)
Amazing.
Incredible.
and then you were done with it.
When do you think the spark of maybe I should start investing in other people's companies happened for you?
Tim Draper (04:35)
Well, I was in business school and ⁓ coming out and trying to figure out what I was going to do. And I kind of wanted to start my own thing right out of business school. And I had four ideas. One was a submarine company, a personal submarine. One was a company outside the US that
a little complicated, but the idea would be that you could invest outside the US back and forth, back and forth, and build your value. And then the number of shares you had in that company would change depending on how you did as an investor. And then only when you repatriated would you pay the taxes. That was number two. Number three was digitized music. My idea was something like iTunes. ⁓
Slava Rubin (05:23)
Nice.
Tim Draper (05:25)
And then number four was a hologram and like a video hologram because I had seen sort of some static holograms. I thought that'd be really cool. Turns out the video hologram is only available now because of Proto. And so I would have struggled for 40 years before that thing happened. The digitized music, that would have worked out OK.
The submarine company, I think, would have sunk. And then the company outside, the investment company outside the US, would have been subject to the long arm of the law. And I would have had trouble there, too. So it was better that I became a venture capitalist and backed other people.
And we did get to back digital music. We backed Peter Goacher, and I brought in a ⁓ great operating guy from the business school, Paul Lego. And the two of them built DigiDesign, which everybody uses Pro Tools for their music. It's now a part of Avid. almost every musician used
Slava Rubin (06:24)
Nice.
Tim Draper (06:35)
Pro Tools. Every professional musician definitely uses Pro Tools. And so I got a little bit of that digitized music as a part of my venture investment.
Slava Rubin (06:45)
What year, if you recall, did you start investing?
Tim Draper (06:49)
1985. this is a funny story. It was 1985 when I took over my father's SBIC. It had $2 million worth of private companies in it. It was unlevered. And I said, why did you do an SBIC if it's unlevered? He didn't give me a very good answer. And I thought, well, I'm going to go to the SBA. I'm going to borrow that money. I'm going to borrow.
you can borrow three to one on the money. And the SBA valued those companies at $2 million. I don't think they were worth that much. And so I was able to borrow $6 million from the SBA to invest in venture capital. And when I went through the process, there were four guys in all of the SBIC program at the time.
And there were 600 SBICs. And today there are 600 SBICs. And there are 1,200 people doing who knows what in the SBIC program. Anyway, the SBIC guy comes to me and he starts going through his checklist. And he goes, oh, you have to have 10 years of investment experience. And I was 26 at the time. And I said, oh, I've been investing since I was 10. And he goes, check.
Slava Rubin (08:08)
Hahaha!
Tim Draper (08:10)
And I was, I invested since I was 10. I owned Mutual of Omaha. That was my first stock. And it just sat there. did nothing. And then I traded it into a couple of other things that started to move. And I was very excited about investing. In fifth grade, I won the, we had an investment, a fake investment.
thing that we did and I won. And so I kind of had it in my blood. I loved investing.
Slava Rubin (08:40)
Do you remember in fifth grade what that stock was?
Tim Draper (08:42)
Prime computer was one of them, but I traded in and out of a few things over the five day period.
Slava Rubin (08:45)
Nice.
I love it, I love it. So is 1985 when you properly start investing like as a venture capitalist with that $6 million balance sheet?
Tim Draper (08:59)
Yeah, right, exactly. And I borrowed the $6 million and put it to work against the $2 million worth of companies that my dad had there. And they were private and not much happened with them. But I was able to put that $6 million to work. during that, for the first three years, nothing happened because it never does.
Slava Rubin (09:15)
And then along the way...
Tim Draper (09:27)
And in the fourth year, the SBA put me on their watch list and then they called me and they said, you're on our dirt list. And I said, what do mean? Well, we're going to call your loan. said, no, no, no, no, no. I've invested in all these startups. This is going to be great. And I had to fly back to Washington and convince them that they were better off letting me manage it than to try to call the loan and then work out all these companies. And fortunately,
A year later, the IPO window opened up. And two years later, Parametric Technology went public. And it became bigger than all the money I had put into everything. And I could pay it all back with whatever interest. I could, my dad's $2 million, I could pay that back.
And it was just a huge bonanza. I think it made 172 times on the money. And it's still one of the biggest software companies in New England. I think it is still the biggest software company in New England, PTC. And so that was the beginning. And then I started to raise another fund. I brought in John Fisher as a partner.
Slava Rubin (10:24)
Holy cow.
Tim Draper (10:41)
The two of us did real well. We brought in another partner, Steve Jervits, and we grew the partnership. We grew the funds. It all became this big, huge thing. And then we gave all the partners an equal vote. We had 12 partners. We gave them all an equal vote. And all of a sudden, what I had created was not quite the same.
And so I spun out and decided to do it again at age 52. so I restarted Draper Associates. And now it's a Draper.VC. Now it's fantastic. I still make the final call on every investment. But the firm's grown a lot.
Slava Rubin (11:30)
Awesome. So just as a
great, you know, coverage of the history in the background here, Beyond Parametric with 172x, incredible. For the sake of our audience, can you give us maybe just a few more of your big hits over the last 40 years?
Tim Draper (11:46)
Yeah, I think the one that had the biggest impact on society is probably Hotmail. We seeded Hotmail, and then I came up with the idea to put a little message at the bottom of everybody's email. So sorry about that, but everybody in the world now can communicate for free because of that. And that we sold to Microsoft. That was a big hit for us.
And we did a whole bunch of things in the internet, and that ended up being a big success. Since then, we funded Tesla at the seed level, SpaceX, first one outside of Elon to go into SpaceX. We funded Baidu, which was the search engine for China. Enormous success. Skype, which also had a huge impact on society because we can now
talk to each other and see each other wherever we are in the world because of Skype and now Zoom and Riverside and whatever else is being used out there. I was the first venture capital investor to buy any Bitcoin. And I the, I seeded Robinhood. I was the first venture investor in, first investor of any kind in Robinhood.
Slava Rubin (12:58)
I mean, these are insa-
Tim Draper (12:58)
They have
done amazing things. Robin Hood has gone. Wow. Wow. ⁓
Slava Rubin (13:03)
Yeah,
bananas. But this is like crazy. Any one of these is pretty impressive, but know, Parametric and Hotmail, huge, incredible results. But then names like Tesla, SpaceX, mean, Robinhood, BTC, Skype dude, this is like nuts. So tell us like a story, for example, like the, is the Tesla first money and the SpaceX first money? Is it the same money, just different time, different company? Or is it different stories?
Tim Draper (13:26)
No,
they're different stories. I had a ride in an electric car. This guy, Ian Wright, gave me a ride. And he was creating something called the Wright Mobile. And I thought, ⁓ yeah, whatever, get into an electric car. I thought it'd be like a little ride in a golf cart. And he straps me in five straps.
And the thing looks like PVC piping. It's a total jalopy put together by wires. And I said, Wi-Fi? This is an electric car. This isn't going to go very fast, or anything. The guy takes off on 280. 0 to 100. And it was terrifying. And then he turns around. He comes back, and he goes, now watch this.
And we're about 60 feet from a stop sign. We're going about 100 miles an hour. And he hits the brake, and the car just stops on a dime. And I thought, my god. Well, at that point, I said, well, you don't have to be a golfer or a tree hugger to want to be in an electric car. Everybody's going to want an electric car. These things are fantastic.
And they had some issues with range and some other issues. And I went around to all the hobbyists. And I met with all these hobbyists. And they all said, well, yeah, we're better than Tesla because of this. So I said, well, I got to go talk to Tesla. So I went to, and it was Martin Eberhard who was running Tesla. And we met with him.
We made the first seed investment with a few other venture capitalists.
Slava Rubin (15:11)
This
is pre Elon.
Tim Draper (15:13)
pre-Elon. And then Elon came and he said, look, I think Elon may have put a little money in there before. Elon came in when the company was out of money. It had run through about $40 million. It was out of money. And he said, I'll put in $10 million, but I get to run the company. And we thought, win, win. Get him. This is great.
And Elon, he is a magical guy. He creates amazing things. First, he got a $400 million loan from the US government. And then he paid about $0.05 on the dollar for the NUMI plant, which is this huge car plant in Fremont, California. And then he started.
putting these cars together, the Roadster, and that was using a Lotus body. And he was frustrated with Lotus. And he just went, forget it. We're just going to make our own car from scratch. And he reinvented the whole car. And that was the S. And the S car was amazing. So.
Slava Rubin (16:22)
What's the,
and then what's the first money into SpaceX story?
Tim Draper (16:26)
OK, so this is pretty funny because I was with my partner, Steve Jervitsen, and I noticed that he was spending all of his nights and all of his week.
Slava Rubin (16:34)
Sorry, this
is after Tesla, is that right? Or is it?
Tim Draper (16:38)
It was after Tesla. Steve Jervitsen was spending all of his nights and all of his weekends and some of the workday on watching rockets go off in the desert in Nevada or whatever. Yeah. And I turned to him and I said, look, OK, Jervitsen, if you're going to spend all this time on rockets, find us the best rocket company. And about
Slava Rubin (16:48)
while he's working with you.
Tim Draper (17:00)
I don't know, two months later he said, you wanted me to find the best rocket company. Best rocket company is Elon's. And I said, isn't he supposed to be running Tesla? And he said, yeah, but this is really where his heart is. And so we interviewed Elon, and it was pretty clear that his real heart was in getting humans to.
Slava Rubin (17:12)
no.
Tim Draper (17:28)
other planets. And so we backed him and it was the highest price and the most money, the hundred million dollar valuation and was, and Elon had put in 30 million of his own money already. And it was the highest price and the most money we had ever put into anything. And then the first three, I think, rockets after
Slava Rubin (17:33)
At what price? Yeah, price? What price?
How much money did you put in?
Tim Draper (17:54)
I think we put in 20 million dollars.
Slava Rubin (17:57)
at 100 million.
Tim Draper (18:00)
Yeah, somewhere between $10 $20 million. We put a lot of money into it. Anyway.
Slava Rubin (18:04)
Do you still have any
of that holding today or has it all been liquidated?
Tim Draper (18:09)
No, it's still with, it's been to, no, it got moved to another fund. It's still being held. Well, the growth group, this is complicated. Forget it. I'm not going to answer that question. They're running a whole bunch of different directions. But let me tell you what has happened. Yeah.
Slava Rubin (18:25)
The net of it, the net of it.
Got it. But 100 million to 400 billion is pretty good growth.
Tim Draper (18:35)
So we put that money in and the thing that happened right off the bat was that he launched a rocket and it blew up on the thing. And we were going, boy, this is going to be a tough one. And then he said, that's OK, we're going to launch another rocket. And it blew up. And then he launched another rocket and it blew up. then.
Slava Rubin (18:57)
Hahaha
Tim Draper (18:59)
And so we were thinking, boy, this is getting tough. This is going to kind of hope this works. And I think he borrowed some money from Tesla to keep it alive during that time. And then we got the first Falcon launched and that was magical. And then it got better and better and better. And he went to the Falcon 9. And the great thing about Elon, he says we're going to Mars and
People think, ⁓ God, we'll never get to Mars, whatever. And we won't get there in near time. But when you say, I'm going to Mars, all the best engineers and all the best scientists join you because they want to help. And so he ended up with the absolute best team. as a result, SpaceX is what it is. And on our way to Mars, we got Starlink. I mean, we're going to get
Slava Rubin (19:53)
Incredible.
Tim Draper (19:54)
We're going to get a whole bunch of other things that come from there.
Slava Rubin (19:57)
Yeah, Starlink's incredible. So while we're on the best of, last question related to this, so Robinhood. So did you have, was this also first money, like super early?
Tim Draper (20:07)
Yeah, my son Billy, who now runs Path Ventures, came to me and introduced these guys to me. And he said, hey, you should talk to these guys. They're making it so you can trade on a phone. And whenever you move to a new platform, there usually are some big opportunities. And so I backed these guys. And they still laugh because I said, look.
I'm all for it, but I had already been through trying to get a broker dealer license, and it was a pain. And I said, you guys can't pay yourselves until you have a broker dealer license. That was my agreement with them. I'll take the investment. And so I guess they had to. It took them about three or four months, and they were living off ramen and peanut butter.
But what a monster success they have created. They are really extraordinary. And I think they're reinventing all finance of all kinds. It's so exciting.
Slava Rubin (21:01)
Yeah, yeah, real-
Very innovative product guys for sure, very impressive.
Tim Draper (21:07)
And my other son, Adam, who runs Boost, he was the seed investor in Coinbase. And the two of them, Coinbase and Robinhood, are both kind of transforming the system of finance around the world. Very exciting.
Slava Rubin (21:25)
I love it. This is like ancestry.com of FinTech. So with your investments, we understand how that works. How about with your personal net worth? So a lot of people typically traditionally like to invest 60 % into public equities, 40 % into bonds. That's the classic old school portfolio. Obviously you have a nice amount into alternative investments of all kinds. How would you really think about like, what is your percentage breakdown?
between public equities, bonds, and then alternative investments of all kinds, what would be that 100 % mix?
Tim Draper (22:00)
I have a lot of Bitcoin and I am holding onto it because it's a hedge against government spending and government spending is a percentage of GDP in America has gone straight up. ⁓ And it's probably the best investment that I will ever hold and I think I'll just hold it.
Slava Rubin (22:13)
Sure.
Tim Draper (22:23)
Then I want to make sure I've got enough cash to make my capital calls, because as you may or may not know, the venture capital calls down money as needed. So you can do whatever you want with the money, but then when you need it, you've got to come up with it. you never want to be backwards on that. So you've got to have enough cash to make your capital calls.
And then it's all about venture capital for me.
Slava Rubin (22:52)
So do you have any public equities holdings?
Tim Draper (22:54)
I do, most of them are companies we backed and grew.
Slava Rubin (22:59)
Got it, so you're not much into just like a random ETF or some picking some Mag-7 stocks just to have it or having some J &J as part of a diversified basket.
Tim Draper (23:11)
No, no, very. Whenever I try to diversify outside of tech, it kind of goes flat line. It's just like nothing happens. No, I don't know.
Slava Rubin (23:20)
And then bonds.
How about real estate as an investment? Do you use real estate as an asset class or just, you know, your homes or whatever?
Tim Draper (23:30)
I own the school, Draper University of Heroes. There are three buildings there, four buildings. And I bought an island, Lupita Island in Africa. And then I have an investment in a golf course in, I don't even call.
I do now, but I'm really bad.
Slava Rubin (23:49)
So if you were thinking like 100
% of net worth, what percentage of real estate? Is it like really small or is it a double digit number in terms of net worth?
Tim Draper (24:03)
Got to do some calculating.
3, 4 % something like that.
Slava Rubin (24:11)
Okay, so pretty small.
And then how about any like art or collectibles, actual tangible assets, things that have value but is not Bitcoin, is not public equities?
Tim Draper (24:21)
I have a Willie Mays rookie card. ⁓ Yeah, Bowman. No, never graded it. just put it in plastic and left it.
Slava Rubin (24:23)
Oh, 1951? Is it great? Is it graded?
It's raw? No.
Is it pretty? We should get it graded for you.
Tim Draper (24:37)
Hahaha!
Slava Rubin (24:38)
And actually,
if it's graded well, I mean, the CEO of the best-grading company in the world has been on this show, Nat Turner.
Tim Draper (24:42)
I
also have ⁓ had Amazing Fantasy XV, which is the first appearance of Spider-Man. And my son Adam and I are both comic book lovers. And Adam said, hey, we got an opportunity to meet Stan Lee, who invented Marvel. Or yeah, he was the creator behind Marvel.
Slava Rubin (24:53)
Incredible.
Tim Draper (25:06)
I said, my god, so we flew down to Los Angeles and we had lunch with Stan Lee. And I brought my first edition of Spider-Man. And I didn't exactly know what I was going to do with it. All I knew was that if he signs it, it's worth less, which is sort of funny. So we had the most fun lunch. And he's the funniest. He was the funniest guy.
and so quick and so bright. And he was 90 years old. he felt like he was 15. so everything was just fun. And he told us all about the history and all of that stuff. And at one point, said, so do you own any of the?
Spider-Man comic books, do you own that first edition? Because he had to leave Amazing Fantasy to help build Spider-Man after Amazing Fantasy. And the only reason he got to put Spider-Man on Amazing Fantasy was because they were going out of business. And they said, well, you can put whatever you want on here because this is the end.
So Amazing Fantasy XV is the last Amazing Fantasy. And it was Spider-Man. And it took off. It was this huge success. So then it started its own thing, which was Spider-Man. And I said, do you have a copy? And he goes, no, they're too expensive. And I said, here. I gave it to him. And then I got comments when I gave it to him.
Slava Rubin (26:38)
You showed him yours. You gave it to him?
Tim Draper (26:47)
I put that on Twitter. I got a comment that said, it's like,
The universe has sort of like all's well with the universe now.
Slava Rubin (26:59)
Nice, nice, I love it,
I love it. We gotta get that Willie Mays rookie, you know, that Willie Mays graded for you. ⁓ So it sounds like your two main holdings in your personal network is really your crypto and your pre-IPO venture. So those sounds like those two big.
Tim Draper (27:04)
Thank you.
I love
art too, I do buy some art. I paint and I buy art.
Slava Rubin (27:17)
Oh, so what
percentage of your net worth would you say art is? Okay, but how about those two big ones? How would you put numbers? They don't have to be exact, but what numbers would you put on Bitcoin as part of your net worth? Sorry, crypto as part of your net worth and pre-IPO venture?
Tim Draper (27:33)
I would not recommend anyone taking the financial strategy I have used for their own portfolio. I would never do that. I would never.
Slava Rubin (27:43)
I agree with that. ⁓
But what is yours?
But what is yours? What is your what are your numbers? High level.
Are we talking like four?
Tim Draper (27:57)
You know,
I didn't really prepare for this. don't really know.
Slava Rubin (27:59)
But you did say I
could ask you any questions. So are we talking like 40-40 sort of thing or 45-45 or do you just want to move on?
Tim Draper (28:07)
So well, most of my money is in crypto, or not crypto, Bitcoin, and startups. And in startups that became public companies and I held them. So big positions in Coinbase and Robinhood.
Slava Rubin (28:16)
Right, so do you think they're about equal?
Sure. Okay, all makes sense.
Tim Draper (28:30)
Big position in Bitcoin. I don't know what the actual percentage numbers are.
Slava Rubin (28:35)
No, that's okay.
This is great. What do you think changing topics here? What's the Tim Draper perspective on today's market? So it's purposely a very open generic question. You could take it to the stock market. You could take it to economy. You could take it to rates. You could take it where venture is. could take it to AI. could take it wherever you'd like. The presidency, the impact of tariffs. Just what do you think about trying to invest today? And today doesn't have to mean literally today, just right now. And you've been around for a while. You've been investing literally for decades.
So what do you think it's like right now to try to find an opportunity?
Tim Draper (29:08)
I think there's real optimism, and I credit this administration for that. I think the last administration spread fear throughout the land, and the SEC was poorly run. was really run in regulation by enforcement. And that puts a dark cloud over anybody in business.
And today, people are starting to, you know, it's like the moles coming out of the dark and they're going, ⁓ hey, it's not so bad here. And so people are innovating again. And it's an exciting time to be a venture capitalist. There are some really extraordinary things happening in healthcare, in space and transportation, around Bitcoin, in AI and ⁓ robotics. There's some really interesting things happening. So
I am ⁓ very excited about all the great things that are happening. The public markets have gotten a little ahead of themselves, but I think what that'll do is it'll open up an opportunity for more IPOs to come in. And I think those IPOs will be very successful and sort of help the whole business run.
I it doesn't feel like.
like the end of a bull market. It feels like we're sort of 3 quarters the way in.
Slava Rubin (30:30)
Got it, so if you were
gonna put an inning on it as part of where we are in the bull, sixth inning.
Tim Draper (30:34)
Six, five or six.
Yeah, because I think when it's the 10th inning is when you've got the people are throwing IPOs out there that don't have no business being IPOs that are not high quality.
Slava Rubin (30:51)
That was the SPAC craze during Zirp.
Tim Draper (30:54)
Yeah, it was a little bit of a SPAC. The SPAC craze was a little crazy, SPACs were reaction to overregulation. And I think we have been overregulated. I think the 33 act and the 40 act should sunset. And we should move on to something much easier and more flexible and something maybe that allows
Slava Rubin (31:10)
Got it.
Tim Draper (31:18)
people to trade tokens. if they're poor, I don't think the government should be making their decisions for them because the government makes decisions like, hey, play the lottery. Hey, do this. instead of saying, hey, invest in your own future, invest in the future of the people around you, build, grow, think in terms of doing something for the future, right now,
the message from the government to the poorest people are, we're taking care of you. We'll do all that for you. We make all the decisions. And those decisions are not good decisions, and they're keeping poor people poor. So I think it's time.
Slava Rubin (31:57)
Right, you're allowed to go
to Vegas and lose your money, but you're not allowed to invest into some high alpha stocks or high alpha pre-IPO
Tim Draper (32:04)
Yeah,
because you can't invest.
Slava Rubin (32:07)
So you're a supporter probably of Robinhood trying to get into this pre-IPO tokenization of these companies, right?
Tim Draper (32:11)
I
think it's a major breakthrough. think it's fantastic. I think Robin Hood has done, I mean, they've done so much for the poor, which is fabulous. Like Robin Hood for the poor. It was great. I don't think they stole from the rich, but they did give to the poor.
Slava Rubin (32:14)
Yeah, I think that'd be huge.
I know it's great. So lightning round on the.
Fair enough. Lightning round on the economy and such. So 12 months out from today, will there be a recession? Yes or no.
Tim Draper (32:41)
No, here's what we're doing. We're going into this, the way they described it on T-boy was the stagflation is like when your house is on fire and flooding at the same time. And the house on fire part is the jobs part and the flooding is the inflation part. And they have to inflate to put the fire out.
so that then they can cut it back. And so there is no need to have.
They will have to keep printing money to keep this economy going, keep those people employed. So they'll keep printing money. What that means is we will have inflation. It also means Bitcoin's a good investment. 12 months from now, inflation's up.
Slava Rubin (33:26)
That was my next question. So 12 months from now inflation, yes, yeah? Inflation is up.
So unemployment is up, flat or down. Unemployment.
Tim Draper (33:37)
No.
⁓ Well, that's OK. It's another complicated answer, which is people say AI is going to take all our jobs. I think AI is just going to enhance all our jobs as long as we use AI. People who don't use AI in their job, think their jobs may be at risk. unemployment, I think, will be
Slava Rubin (33:43)
12 months from now.
Tim Draper (34:09)
I think they'll keep it about where it is and they'll inflate to keep it where it is. But there's a weird part of this. There's a new culture where people are kind of underemployed. They're going to work two or three days a week and then I don't know what they're doing with the rest of their time. And that came from the pandemic and all that. now very...
Slava Rubin (34:11)
Flattish
And then.
Tim Draper (34:35)
People aren't, at least in California, although a lot of the other country, rest of the country, they're back at work. In California, I've noticed the commercial real estate is pretty empty and they are only coming in one or two days a week.
Slava Rubin (34:50)
Interesting. How about the Fed funds rate? Is that flat up or down 12 months from now?
Tim Draper (34:58)
I think it's probably a little down because they've got to keep those people employed. And that creates more inflation. Bitcoin price goes up. Yeah.
Slava Rubin (35:08)
Gold at an
all time high today, right?
Tim Draper (35:10)
Yeah, I don't know why people are still buying gold. mean, yeah, sure, it's nice for jewelry or whatever. But you're not going to be able to use gold to buy a Starbucks coffee. But you will be able to use Bitcoin for that. I think people are making a kind of a, it's like you're going back in time because you're scared. Why are you buying gold?
Slava Rubin (35:31)
So let's talk about
Bitcoin for a second. You've been in it for very long time. Do you remember what some of your entry prices were in the beginning?
Tim Draper (35:40)
Yeah, four bucks. Well, it was supposed to be four bucks. And then it was complicated. We got front run by the guy who was supposed to make the chips for us. And they mined the Bitcoin until Bitcoin was about 36. And then we stored that Bitcoin at Mt. Gox and then Mt. Gox stole that money. And so then I thought it was the end of Bitcoin.
Slava Rubin (35:42)
Nice.
Tim Draper (36:09)
But Bitcoin only went down about 15 % on the news that now Gox stole all that money. so now we're... So then I thought, people must really need this. And first I thought, it's just drugs and guns. And it turns out all those drugs and guns guys are caught because Bitcoin keeps perfect record. But what it was was all the 2 billion people who were underbanked or unbanked.
They're now a part of the world economy because of Bitcoin. They can all participate. And so I got very excited. And so I started buying Bitcoin about a hundred, a couple hundred, a thousand. And then I bought a bunch at the auction, the 600, at 632. It was trading at 618 and the auction came up and I bid over market. I think I was the only one.
a bit overmarket because I got them all. I thought I'd only get one or two of the known. The US Marshall's office of the the coins they confiscated from the silk.
Slava Rubin (37:05)
This is the Silk Road auction or?
Right, right, exactly, exactly. So amazing, so you're in at 632, you're obviously in it at lower, we're at like let's call it 110, 120 now depending on when you're listening. What do you think it hits in the next 12 months? What do you think it hits in 2030?
Tim Draper (37:32)
So the question is, when do people finally abandon fiat currencies?
Slava Rubin (37:40)
Meaning like the
US dollar, fiat currency meaning like the US dollar.
Tim Draper (37:43)
Right. Yeah. When do they finally abandon having this system? It's I mean, now I'm already looking at it as antiquated, the system of of ⁓ a bank and a government as a trusted third party for holding your money or whatever. When you can do it all in software on the Bitcoin blockchain, it keeps perfect records and taxes should be paid that way. Everything should be done that way. Less accounting, less auditing, less bookkeeping.
So there will be a moment when there's a run on the banks and the dollar and everybody's going to be clamoring to get rid of their dollars. So when people say, well, how high does Bitcoin go? Well, one Bitcoin will still be one Bitcoin. It's just the number of dollars will eventually be infinite. I mean, the number of dollars to buy a Bitcoin has
has continued way up. another way to look at it is the dollar against Bitcoin. mean, dollar keeps getting to be worth less and less. The dollar against Bitcoin is going even further down because as Bitcoin grows its network, Bitcoin becomes more valuable. And so as its valuing increases, it's, you know,
true value increases. At the same time, the dollar is decreasing in value and against Bitcoin, it will continue to decrease at an even faster rate. So I think if you're holding onto a lot of dollars.
I would highly recommend that you hold a lot of Bitcoin instead. And if you are responsible for a company, there's a chance for a bank failure, and you are personally liable for all of the people for the next month of payroll. And if you're responsible for a family, you should hold enough Bitcoin to keep them all alive for six months.
And if you're responsible for a government, you should hold Bitcoin because as an insurance policy against your own currency being devalued. I think now it used to be, hey, this is a speculative thing, fun, whatever. Now it's like, this is an insurance policy for you. And longer term, it's going to be like, this is the only store of
Slava Rubin (40:16)
So I'm gonna go back to give me a couple of predictions. What's 12 months out, the value, what's 2030?
Tim Draper (40:26)
Well, I was only right on one of my predictions. So it's sort of hard for me to be good at this because my first one was in 2014. Bitcoin was at $180. And I got on TV and I said Bitcoin will be 10,000 within three years. And it hit 10,000 almost exactly to the day three years later.
Slava Rubin (40:35)
It's okay, we all have opinions, we wanna hear yours.
Tim Draper (40:57)
Then Bitcoin dropped to 4,000. And I said, in four years, that was from 2018, in four years, 2022, Bitcoin will hit 250,000. I didn't realize that the horrible federal government at the time would go so negative on Bitcoin. And so that was not a part of my prediction. And I didn't realize how
Slava Rubin (41:16)
COVID.
Tim Draper (41:26)
how lacking of an understanding they had of basic economics. They just made huge, huge errors. And so I think we set the whole thing back for years. And now it looks like it's moving forward, although slowly. It's not like it's jumping back into action. We had entrepreneurs that said, have to geofence the US because they were
They were innovating in new ways. so the US, we didn't get any of the value of the air drops and the smart contracts and the DeFi and any of stuff, because we weren't allowed to do it. Our government was in the way. And now it's like coming out. It's getting out of the way. So I guess my 250,000 is probably
A year from now, that'll hit 250,000, or it'll be higher than that. And then you said 2030. I think if you said 2035, would say the word 2035, it's infinity. Because I think there will no longer be a dollar.
Slava Rubin (42:28)
Okay, great.
We could do 2035, that's fine.
Infinity.
Whoa, but it still has to have a value. like, guess you're not gonna, no, no, I hear you. You're saying you're not comparing it to the dollar. So that's why it's in fake.
Tim Draper (42:49)
No!
Yeah, you
don't compare it to the dollar. You compare it to an acre of real estate in tax.
Slava Rubin (42:56)
I'm gonna push back.
mean, I infinity is a bit strong by 2035, but maybe we will have it. I understand, I understand.
Tim Draper (43:01)
Well, infinity against the dollar. I don't think there will be a dollar. You know,
when I was 10 years old, my dad gives me a million dollar bill. And I said, whoa, a million dollars. What can I do with it? And he said, nothing. And I said, what do you mean? A million dollars is a million dollars. So that's a million Confederate dollars. The Confederates lost the war. They had huge inflation. Everybody was trying to turn their Confederate dollars into union dollars.
And it was this crazy thing. And now the only thing anybody accepts are the union dollars. And so I'm looking at this million dollar Confederate dollar. It's worth nothing. I think the same thing's happening now with the union.
Slava Rubin (43:42)
No, I like
it. It's a hot take. Very strong, very strong. You obviously have had so many early strong picks, which we talked about before, Hotmail, Tesla, Robinhood, et cetera. You obviously have made some investments in the last few years. I don't know all of them, obviously, but can you name one or two or three companies that you're excited about that could be one of those next companies that we should be keeping an eye out for? That it's quite early still. mean, they're not unicorns.
⁓ It's an early company that has some momentum. You're excited about the space in the company.
Tim Draper (44:14)
Well, I mean, about 18 months ago, I would have said Oklo but now it's a unicorn and it's more than a unicorn. It's like a rhino. It's a fat unicorn. It's $24 billion market cap. And that was nuclear power. And I think there are other couple, we've made a couple other bets on nuclear power that look promising. We have made some investments in
Slava Rubin (44:31)
Nice.
Tim Draper (44:41)
all the things that have gone from where people are now having a bio cure for what used to be a chemotherapy. So we feel like the world is going from chemotherapies to bio cures.
Slava Rubin (44:56)
Can you give me one name?
Tim Draper (45:02)
Actually, I'll give you this one. Prospera. Because Prospera is the country within Honduras, the country within the country that is allowing the freedom. And they have a city called Infinita. And that is where all the really cool bio experiments are happening. And so all these guys who can't figure out how to negotiate through the
labyrinth of the FDA are doing all their stuff in Infinita within Prospera. So that's a really interesting one. And we made an investment in both Prospera, the city, in, I mean, the country within the country, and Prospera, the city within the country. And we're suggesting all of our
our bio-cure companies go there to do their work. if something gets approved with any FDA anywhere around the world, Prospera approves it. so you can go there for, eventually it'll be medical tourism. And they have this great relationship that has held up.
Slava Rubin (45:53)
Interesting.
Cool, can you give me one more?
Tim Draper (46:14)
through both the capitalist government and the socialist government. And so I think they're going to be able to do this. And I think it's going to be very successful for Honduras. I think Honduras will get really rich from
Slava Rubin (46:29)
Super interesting, so you're long on nuclear, Oklo you're long in doing kind of bio experiments, Prospera, can you give me?
Tim Draper (46:38)
I like
space and transportation too. have
Slava Rubin (46:41)
Can you give me one that's under $2 billion?
Tim Draper (46:46)
Yeah. Yeah, we got one that hypersonic rocket that has made a major breakthrough. ⁓ And it's called, do your guys want private company names?
Slava Rubin (46:56)
What's that called?
for sure.
Yeah.
Tim Draper (47:05)
OK, Venus Aerospace. And that one's doing, it's taken off, literally. And.
Slava Rubin (47:10)
Nice.
Tim Draper (47:14)
And then we a traffic cop in space that's called Slingshot Aerospace. That's pretty interesting. They're going to know where all the satellites are at all times. And we got one called ICEYE that sees through
Slava Rubin (47:33)
Okay, great. So you obviously are very smart, super curious, always willing to learn more, been around for a long time, doing a lot of things. What do you like to read? What do you like to watch? What do you like to listen to to help make Tim Draper Tim?
Tim Draper (47:48)
Well, know, I like reading, well, I have read pretty much most of the classics, you know, everything from Shakespeare to the Bible, the Koran, the Book of Mao, Mormon, Book of Mormon, and the play Book of Mormon.
I read science fiction a lot. I've read every Dune book, read almost everything, I think everything, by Asimov. One of my favorite books was something called Zero to One about my industry ⁓ by Peter Thiel. And my dad wrote a fabulous book called
Slava Rubin (48:23)
Peter Thiel
Tim Draper (48:28)
the startup game, I wrote one called How to Be the Startup Hero. My son wrote one called Breakfast with Pops about his breakfast with my dad. ⁓ And so those are all kind of fun for our business, good for our business. I tend to read lots of science fiction.
Slava Rubin (48:40)
That's great.
Tim Draper (48:51)
and comic books. And I'm trying to expand my mind to what's possible. That's a big part of my life. How do I make things possible? And you get captured from people's imaginations. So I tend to read things that are more imaginative. And then nonfiction.
Slava Rubin (49:03)
I love that.
Tim Draper (49:17)
⁓ Sapiens. my god. What a great book on anthropology. It's fantastic. I couldn't read it. It was too deep. So I listened to it. It was fantastic. And then I listened to T-Boy Podcast. I think that's great.
And during football season, have a fantasy sports team.
Slava Rubin (49:42)
Who's your team? Who's your NFL team?
Tim Draper (49:46)
Oh, the 49ers. But everybody's injured. The whole team. Oh, no, you're a dolphin fan. That is a rough one.
Slava Rubin (49:48)
Fair enough.
They're still doing better than my dolphins.
Yeah,
it's been rough for a long time. ⁓
Tim Draper (50:03)
I do
have some advice for the Dolphins owner if they ever want to hear from me. I won't say it on the air.
Slava Rubin (50:09)
yeah, what is your... Okay,
sounds good. The last question, which is we always put our guests on the spot, which is give us one public markets pick that you feel will be strong three years out, and then give us one pick which is not public markets. Obviously you could pick Bitcoin, which would be a very obvious one for you, but you're allowed to pick it because you can do whatever you want. So give us first the public markets pick and why for three years out.
Tim Draper (50:33)
That's interesting. guess three years out, I I love my own companies, but I'm going to go outside them because I don't want a bunch of investors to come blame me for what's happened here.
Slava Rubin (50:45)
Yeah, no, no, this is investment
advice. This is just a show, so it's all good.
Tim Draper (50:48)
Yeah, this is not an investment. I am not an investment advisor, nothing. So I'm going to say Meta. I met Mark Zuckerberg, and he is a dynamo. He's special. And he is still pushing hard. And I think maybe those glasses are going to be a big part of our lives. So I'm going to say Meta for your audience.
Slava Rubin (50:51)
Nope.
Okay.
Perfect. And then.
Tim Draper (51:16)
Or just, you know, I I put all my money back into my venture business. That's kind of what I do. So you can go ahead and do what I say, or you can do what I do.
Slava Rubin (51:24)
No, fair enough. then what's one?
Perfect.
What is one pick that is not in the public markets? Any pick for three years out. It could be a private company, a commodity, a comic book, a public token, anything.
Tim Draper (51:41)
Bitcoin.
Slava Rubin (51:42)
Of course, you didn't really surprise us there.
Tim Draper (51:45)
Bitcoin, Bitcoin. It's almost like, you know, it's like fishing with dynamite. It's so easy.
Slava Rubin (51:47)
Infinity.
Fishing with dynamite.
I love it. I love it. Okay. Well, I only look down because I take notes, but we covered a lot of ground from starting with multiple generations of Drapers with your grandfather being the first VC back in 1957. You then doing so many more things, Draper University, Meet the Drapers, having that feedback or that guidance from your grandfather so long ago about the human connection is so awesome because the world of AI is changing everything. But yet, if you want to buy or sell something, it's really about...
the human connection, such incredible guidance. I love the bet. I'm gonna need to use this for my kids, which is, you know, don't drink, drugs, et cetera, until you're 21, incredible. You you started back.
Tim Draper (52:32)
by the
way, if they don't make it, the bet is about honesty.
If they make it, it's about perseverance and fighting off peer pressure. But if they don't make it, it's about honesty.
Slava Rubin (52:51)
Nice, so you had too many ideas, so you decided instead of being an entrepreneur, you would lever $2 million into $6 million more. You started investing and that was the beginning of all of the excitement. Parametric off to the races, a 172X followed by many more incredible early investments. I know this is hard for the listeners to believe, but this is all one person, Hotmail, Tesla, SpaceX, Baidu, Sky, BTC, Robinhood, et cetera.
You're at BTC, you know, as early as $4, bought a bunch more at $632. You predict $250K within 12 months. Infinity, which is a bit of a bold statement, by 2035 because we won't be using the dollar anymore. You know, really, I tried to push you on where you invest your money, but at the end of the day, it's all into crypto, mostly into Bitcoin and your pre-IPO venture stuff, which I love your high risk, reward. personally am similar.
Tim Draper (53:43)
Now you call
it pre IPO, I call it seed investing. That's where I put it in and then I doubled down when they're.
Slava Rubin (53:47)
Yeah, yeah, ⁓
Perfect,
even more risky, super early. But I do like that you called out the fact that you did have your Amazing Fantasy 15, the original Spider-Man. You love your Willie Mays rookie, even though it's not graded. there's, you know, you have a lot of optimism for the market. You still think there's a lot of upside. Public markets are a bit frothy, but still okay. Maybe then sixth inning of where we're at. No recession coming forward. There's gonna be a bunch of inflation, your top concern, which is why you're, again, pro-Bitcoin.
Not a lot of unemployment and you do think the Fed is going to be lowering rates. There's a lot of areas that you love nuclear with Oklo, which is now go off to the races. You taught everybody, including me about Prospera, you know, this area we can do bio experiments in Honduras. You like the space area beyond SpaceX with Venus or Slingshot or I say, and you obviously keep yourself creative and curious reading about the things that are possible really about, you know, comic books.
⁓ science fiction and other things that kind of stretch your mind, which is awesome. You gave us a really boring but awesome pick for the public markets, which is Meta because you're super excited about how bold Mark is still being in the world with his glasses and more. And you surprised no one with your final pick, which is Bitcoin to infinity at the end. Tim, thank you very much.
Tim Draper (55:07)
Hey, that was a great summary. Thank you, Slava. That was really a fun interview. yeah, you got me in a lot of different places. So thank you for that. And I definitely want to link to this one.
Slava Rubin (55:19)
You got it.
