the Googles, Facebooks, Twitters, Dropboxes and Airbnbs. He said that after a couple of years one can tell if a startup has a big breakout. He said SV Angel is unable to do follow-on investments because of the size of their fund. Thus the metric of whether they do a follow-on investment is how the startup is perceived by customers. He said SV Angel only invests out of the Bay Area and New York City.
Tim Draper said that “back in 2004-2006 when no one was funding anything” they had to write extra checks, citing big checks they wrote on Baidu, Skype and Hotmail. He remarked that with Hotmail it “was touch and go the whole way. At the end [before Hotmail was acquired by Microsoft] we were still writing checks” and many people at the time thought we were “burning dollar bills.”
Adam Draper said Boost typically cuts the first check that startups receive, that the companies receive $10,000 to $15,000 and that Boost has to be Darwinian about the future of their companies. In terms of entrepreneurs, they look for scrappiness and/or commitment. Boost tries to find entrepreneurs who would still be working on their startup even if they were living in their parents’ apartment.
The younger Draper then discussed the evolution of Boost, saying that Boost VC has been around for a year. When it first started, they needed three things: office space, good mentors and speakers and good companies. He found that getting the good companies was the hardest task. He joked that in the first session Boost had to “sell the companies, it was us selling them to give them money.” Since, they have received some publicity as Bang With Friends spun out from its first session. He also talked about how Boost accelerator has a Bitcoin thesis and that many of its companies focus on leveraging Bitcoin.
Ronny Conway was asked about his views on Bitcoin and he said that he takes a less thesis-driven approach to investing and more of a market-driven approach. He then answered a question from Roizen about what he learned at Google and whether it was applicable to what he is doing as a venture capitalist. Ronny Conway said that what he learned at Google is how big companies work and less about venture capital. He learned a great deal about venture capital through osmosis whether it be from his father, Google Ventures or Andreessen Horowitz.
He then answered a question from Roizen about A16Z’s agency model by saying there is only one Ben Horowitz and one Marc Andreessen. He added that it is very difficult to execute the agency model effectively and that a venture firm has to be absolutely all in, citing Benchmark as the polar opposite of A16Z. He said that what gets him most excited as an investor is that mobile will be massive because “everyone has a computer in their pocket and tech can now impact the masses,” noting Door Dash and Uber as two companies he really admires.
Roizen asked Ron Conway about his views on venture firms and he remarked that SV Angel “doesn’t think of the VC firm but of the partner at the VC firm.” SV Angel asks, “What partner will mentor this entrepreneur the most?” He cited a couple of examples by noting he believes Alfred Lin at Sequoia would be a great board member at Airbnb because he did Zappos. Similarly, he believes that Roelof Boetha of Sequoia would be a great match for Square because he was an early team member at Paypal and has domain experience.
Tim Draper spoke about his international investments. He said that the Hotmail investment propelled DFJ to look internationally given its global reach. That’s how they found Baidu and Skype. Adam Draper agreed that entrepreneurship is everywhere but remarked that the Silicon Valley ecosystem is a thousand times better than anywhere else. Ron Conway agreed and said that they try to bring their companies to the Valley because it seems startups can move much faster here than anywhere else. He then discussed the importance of immigration reform and his active involvement in FWD.us, which was founded by Mark Zuckerberg.
Ron Conway also discussed the tech class war in San Francisco. He noted that while “President Obama is talking about the income inequality gap, San Francisco happens to be the poster child.” There is “not enough affordable housing and that is driving people crazy and the tech industry is being accused of displacing people.”
The elder Conway discussed how he is working with San Francisco mayor Ed Lee on initiatives such as SF Citi. SF Citi is a group that comprises 850 tech companies, which he said probably represents 95 percent of the tech workers. He noted that SF Citi encourages volunteering and that this was his topic at the keynote speech at Techcrunch Disrupt. He discussed Circle the Schools, an initiative in which the principal of a school tells tech volunteer workers what the school needs and ask the techies to fix the problem. He also noted an initiative by Marc Benioff of Salesforce, which is raising $10 million to fight poverty in San Francisco.
Tim Draper spoke about his policy initiatives such as Six Californias. Roizen noted that he was also very involved in the California School Voucher issue, proposition 38. Roizen said he needed 800,000 signatures to get Six Californias on the ballot. Tim Draper said it will be hard to do but he is on schedule. Adam said he supports his father’s Six Californias initiative because it makes “people ask the question of whether change can happen.” He added that in 1849 there were plans to split California into two states and that breaking up California into multiple states had featured on the ballot three times.
Ronny Conway was asked about important lessons he learned from his father. He said that the most important thing he learned was to do the right thing for the entrepreneur, to help them and that following that principle will ensure “it’ll work itself out in the long run.” He also stressed the importance of work ethic, and how applying work ethic to help entrepreneurs is the key to success. He remarked that people are often disappointed by these pieces of advice because of how very basic the advice is.
Adam Draper said he learned from his father to have a “crazy passion for life,” that his father’s passion for life is intoxicating. He said he learned from his father that the only way to change the world is to try crazy things.
One audience member asked the panelists what they thought about crowdfunding. Ron Conway said that “crowdfunding is the way of the future,” noting that SV Angel is an investor in Crowdtilt. He said, “the more ways an entrepreneur can get funded the better.” Tim Draper seconded this sentiment. He said he loves it because it democratizes the whole system, noting that DFJ has backed Angellist and FundersClub.
Reprinted with permission from The Dish Daily, an online journal of student news and opinion at Stanford University.
