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Our philosophy on entrepreneurial investing contemplates that
we provide more than money. A start-up venture capitalist becomes
a company's financial strategist, headhunter, investment banker,
and corporate therapist, who provides support and confidence to
a fledgling team. As a board member, we are active, and we have
the energy, experience and contacts to help take the company to
the next stage and beyond.
At Draper Fisher Jurvetson, we believe that our:
Entrepreneurs are extraordinary individuals possessing
unusual intelligence, energy, vision and drive, and should have
large stakes in their companies that can generate great wealth
for those who make the early sacrifices. We understand that the
credit for success justly goes to the entrepreneur. We bet on
the ability of the founding team to develop their business, adapt
to inevitable changes in their plans, and to grow with their companies.
Successful founders will surround themselves with the best people
they can. While we will often help the founders recruit additional
executives for their team, we do not invest in any opportunity
with the intention of replacing the founders.
Portfolio companies, with our help, have a chance to
develop complete teams and mature business plans that position
them for growth and future financing (if it is required) and
eventual liquidity. These entrepreneurs become the heroes of
American industry.
Investors have an excellent opportunity to achieve extraordinarily
large capital gains on their investments, while participating
in the initial capital formation process that is critical to the
development of new technologies and services that are becoming
the mainstays of the U.S. economy.
Friends, partners and industry contacts are our most valuable
resources. Our development of a "value-added" network
of Limited Partners is a powerful resource we can bring to bear
in our efforts to help our portfolio companies succeed, and is
instrumental in maintaining our excellent deal flow.
(Excerpt from speech given by Tim Draper at a Netprenuer
Group Meeting.)
1. Where do you start? Start with a big market. Go after
something that has hypergrowth, where the price-to-earnings (P/E)
ratios are high and the air is clean and the water is fine.
2. Go for big margins. What that means is: What is your
area of expertise? What are you really good at? What are you specifically
best at? What does your painting look like and why is it that you
are the only one who can develop that painting? Big margins.
3. Super people. You are constantly on the lookout for superheroes.
Your absolute, sole reason to exist is to find as many people smarter
than you as you can. There is only one person who is smarter than
everyone else, and I'm just assuming that person is not here. For
me, it was really easy. I am constantly on the lookout for really
great, smart people, and I think you should be, too.
4. Build market share fast. If you are on the Web, build
market share fast. Grow. Move. Use a virus, use a magnet, use a
whatever you can to get to be the biggest one fastest.
5. Partner and create a network. Use that network and build
it.
6. Win. Grow big, fast, and just win. Be the winner. You
don't want to be Number 2. Just don't. It's not that much harder
to be Number 1 than Number 2, just that extra oomph at the finish
line.
7. Get a customer. That should have been earlier. A customer
is absolutely critical to your success because you need the feedback.
8. Now, go get another customer so that the first one doesn't
own you.
9. Build strategic relations with one or more of those key
customers. "Strategic relations" just means money has
to go one way or the other, so it's better to have it go towards
you.
10. Take it public.
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