Interview: Tim Draper on Fintech, China and the ESG Criteria

Billionaire investor Tim Draper says he's been 'ESG forever' and shares his views on fintech, including venture capital, bitcoin, and decentralised finance

Tim Draper is one of the most well-known venture capitalists in the world and the founder of the international network of firms, Draper Associates, DFJ and the Draper Venture Network. He has been investing in fintech before the term was even popularised.

With billions of dollars in investments and exits across more than 200 deals, Draper has been an early backer of many world-recognised brands including Coinbase, Tezos, Robinhood, Tesla, Ledger, SpaceX, and Twitter, to name a few.

He is also a prominent Bitcoin enthusiast, having purchased 30,000 bitcoins in a US Marshals Service auction in 2014, which were initially seized from the Silk Road black market by the FBI.

In this interview, Draper discusses his thoughts on the current state of fintech and offers insights into his vision for the future of the industry. He also weighs in on China's role in technology and how the ESG criteria could be better off when left to the free market.

Here's what he had to say:

Tim Draper (Full Q&A Interview)

Q: What made you want to get involved in fintech?

There was no liquidity in the public markets. Regulators had corrupted the IPO world with around congress passing Sarbanes Oxley. There was no way for these companies to raise money. It was horrible.

Q: What advice would you give to fintech startups looking to raise capital?

Come to Draper Associates. We were first, and we continue to innovate.

Q: As the first outside venture capitalist to invest in China's tech industry, what are your thoughts in regards to fintech in the country?

China was awesome. They had opened up and encouraged innovators and free markets for 40 years. And just as it started to work, they got a dictator who wants to control everything, and all that entrepreneurial energy was quelled. It was a shame, and I hope they see the error of their ways. Freedom makes money. Control stifles creativity.

Q: What are VC's most looking for in terms of investment for the long-term?

I can't speak for all of the VCs, but what I look for is a future I want to live in.

Q: You were an early investor in crypto, having bought 30,000 bitcoins in 2014 for $400k USD, which today would be valued at around $1.5bn USD. How did that investment turn out for you?

One of my best, but I overpaid. I paid $632.

Q: What's your risk appetite when it comes to crypto?

I think of Bitcoin as trust and freedom and a future I want to see. I want the freedom to use currency anywhere in the world without bank friction or government printing presses. I want to be able to trust my currency not to be lost to inflation or government corruption.

Q: How significant a role is ESG playing in influencing investor choice?

I have been ESG forever. It is just good business. But when people try to MAKE me do ESG investing, I resist. Regulators often don't realise that their actions can have the reverse effect of what they intend.

Q: Is venture capitalism still recognisable from when you first entered the business to today?

Yes, very much so. Although I used to knock on doors of new businesses to see if they were looking for money, and now more than 10,000 businesses reach out to me each year.

Q: Where do you see the most significant opportunities for fintech moving forward?

I believe in the decentralised world of finance. I expect DeFi will represent much of the fintech world in the next several years.

Q: What excites you the most in the field of financial technology? And how do you anticipate things to play out by 2030?

I expect that once I can buy my food, clothing and shelter in Bitcoin, that I (and everybody else) will see no need for fiat currency. Why would I succumb to government-controlled currency when I can have free and trusted currency.

Q: Please summarise your life in three words.

My business life is Venturesome, Exciting, Dynamic.

Q: Last, what is the one thing you want everyone to know about Tim Draper?

I love and trust people, and love and trust wins in business.

***

Disclaimer: FinTech Magazine is not an intermediary, broker/dealer, advisor, or exchange and does not provide services as such. The opinions in this post are those of the interviewee and for informational purposes only. They do not reflect the views of the author or the publication. Please conduct independent research when making decisions and do not rely on the views published on this page.

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