Tim Draper Explains How To Get Funded

One of our partners, Vator.tv, just released an interesting interview with Tim Draper, Founder and Managing Director of Draper Fisher Jurvetson, a prestigious VC firm. The conversation was centered on the types of companies and their teams that the firm invests in as well as the process. Although the economy is sinking, Draper believes that it is neither a fantastic time like in 1999 to raise money, nor a tough time like in 2002 when VC's kept close reign over their money; rather, "...the pendulum is somewhere in the middle." At the same time, changes within an economy usually give rise to entrepreneurs who find opportunities to build businesses. But, what types of entrepreneurs is Draper looking to invest in?<!--more-->

In determining whether or not to fund a company, one of the less obvious questions Tim raises is whether the entrepreneur is meant to be doing what they are doing. In other words, is the entrepreneur overly passionate to a point that he will do whatever it takes to make the company successful? At the end of a meeting, a VC should feel that funding or no funding, this entrepreneur believes failure is not an option. The end of the meeting should feel as if "a train is leaving the station" and that the entrepreneur is making something happen either way.

Are these individuals completely driven to do what they are doing? Is this something deep in their souls that they want to make happen? Do they all get a long and respect each other or do they fight and disagree? A driven entrepreneur should be surrounded by other driven, intelligent people who likewise believe in the company and who are all "going for it!"

Tim also talks about other requirements such as a rapidly expanding market with minimum market cap of $1 billion, a clever marketing strategy for entering the market and "peeling away layers," and a feasible technology that brings a critical component to the market. However, as if convincing one VC is hard enough, you'll have to gather the approval from all general partners and their special voting system that they don't talk about. Here's the video to get the full scoop: