"VENTURE CAPITAL IS NOT FOR GIRLIE MEN"
I initially read this article in hardcopy since I went old school and subscribed to Fortune a few months ago. The article is another entertaining piece on Tim Draper who's been getting a fair amount of press lately because of his firm's Baidu and Skype deals. The magazine has a funny picture of Tim flexing like the Hulk with his suit pant rolled up and no shoes. Tony, who's childhood friends with Tim, says the picture is totally Tim.
There are all sorts of approaches to the venture capital game. Some investors study one area so deeply they become experts. Others simply back the best entrepreneurs. A third type invests only in companies that aim for giant markets. Then there’s the Tim Draper method, which is a bit like using a machine gun to shoot a fleeing duck: Fire enough bullets at the darn thing, and something will hit the target.
Because of his scattershot approach, it has long been fashionable with a certain crowd on Sand Hill Road, the VC power corridor in Menlo Park, Calif., to dismiss Draper as something of a hack. Back in 2001—when it was popular to mock the silly dot-com investments of venture capitalists—Draper was even singled out as one of Silicon Valley’s “dumbest” VCs by the magazine eCompany Now (owned, like FORTUNE, by Time Warner). But nobody’s laughing at him today. At the moment, Draper, 47, is the hottest venture capitalist on the planet.
Most of his peers would kill for even one investment in their careers as successful as his two coups this year alone. The hottest IPO of the summer was that of Chinese search engine Baidu, the shares of which soared 354% in their first day of trading. Draper’s firm, Draper Fisher Jurvetson, invested $14 million in Baidu, a stake that is worth more than $500 million today. eBay’s $2.6 billion deal to buy Skype gave Draper his second big hit of 2005. Together, Draper’s Skype investments and that of his father produced returns of more than $250 million from a stake similar in size to what he invested in Baidu. (full article)