Can VCs Be Bred? Meet The New Generation In Silicon Valley's Draper Dynasty

Over the course of a half-century, the Draper family has carved out a name (and a fortune) in a place where breeding and ancestry are thought to be irrelevant. Now it's time for the debut of the youngest generation.

Photo by Robyn Twomey; Hair and Makeup: Renee Rael; Styling: Tietjen Fischer; Shot on location at Fioli Estate, California

Bill Draper's salt-and-pepper eyebrows grow like weeds. They are the one feature on the venture capitalist's handsome, square-jawed 84-year-old face that give away his age; they're also a mark of the Draper gene pool, an optometric family crest. Bill's son, Tim, also a venture capitalist, has similarly unruly patches. And Tim's sons, Adam and Billy, both entrepreneurs, have a tamer twentysomething variation. "Those are some power brows," Adam says of his dad's and granddad's facial hair. "You meet them and you just look at their brows for a little bit--they're like visors."

Bill has the air of a vintage businessman. Dressed in a camel-hued sports coat and burgundy dress shoes, he looks like the kind of man who wouldn't dare enter an elevator without first holding the door for the women getting on. He credits his start in California to his father, General William H. Draper Jr., a former undersecretary of the U.S. Army who is considered the first professional venture capitalist on the West Coast. When the general opened his VC firm in the late 1950s, he recruited his son Bill, then living in Chicago, as one of his first employees, thus launching the Draper dynasty. "We rented a car and went out and knocked on doors in the orchards," says Bill, recalling the apricot groves that filled Sunnyvale. In those early days of working for his father, Bill would pull over to any storefront that had the word technology in its name. Then he'd ask the company if they wanted help in exchange for some equity.

Silicon Valley is thought to embody the new American dream: a place where nobody cares who your parents are--as long as you have good ideas. It thinks of itself as a meritocracy, which makes the Draper family an anomaly.

At that point, Silicon Valley was more valley than silicon. El Camino Real, the clotted artery running through Palo Alto and Menlo Park, had a Five & Dime instead of a Tesla dealership. Sand Hill Road, now home to the world's most powerful VC firms, was the dirt path on which Bill's son, Tim, would ride his Sting-Ray two-wheeler, shimmying off its dusty hills as if on a playground. Yet that soon changed, thanks in part to Bill Draper, whose office is an homage to a six-decade career that has spanned money, politics, and philanthropy. His mahogany bookcase is stocked with framed photos of himself with members of the elite network he curated over the years, including U.S. presidents (Reagan, Clinton, Obama), presidential hopefuls (McCain, Romney), and even a dictator (Fidel Castro). And then there are the snapshots of those who became real friends, like Supreme Court Justice Sandra Day O'Connor and President George H.W. Bush.

The Valley Girl Bash: Jesse dancing with MC Hammer.

"Bill started during a period where VC was truly a cottage industry, where deals were done with a handshake," says Adeo Ressi, founder of TheFunded, a website that tracks the VC industry. In the 1960s, Bill founded two VC firms, Draper & Johnson and Sutter Hill Ventures, while becoming known for investing in people rather than markets. Altogether, he made bets on more than 500 companies, visited more than 100 countries, and was the first VC to invest in developing countries such as India. Bill was instrumental in transforming venture capital into a respectable business. And he is now one of the few living patriarchs of Silicon Valley.

That word--patriarch--is not typically paired with Silicon Valley. Unlike Westport or Dallas or even San Francisco, the Valley isn't known for respecting the elite trappings of old money, connections, or inherited power. On the contrary, the Valley is said to embody the new American dream: a place where nobody cares who your parents are--where nobody even cares if you're a college dropout--as long as you have good ideas for making millions. "Silicon Valley likes to think of itself as meritocratic," explains Elsa Davidson, author of The Burdens of Aspiration, a book about the social forces at play in the Valley. Historically, Davidson adds, the Valley's social code developed in contrast to East Coast business traditions that were seen as "old, traditional, and vertical."

All this makes the Draper dynasty an anomaly. "Silicon Valley is like the gold rush--most people are first generation," says Samir Arora, a VC and CEO of Glam Media, a top women's online property. Arora himself is an Indian immigrant. "So to actually have a family, a history, and a heritage as part of the venture fabric, is very rare," he adds. Arora knows the Drapers through Tim, an investor in Glam. Tim is the most prominent member of the Draper clan, a billionaire partner at Draper Fisher Jurvetson, which is famed for backing Baidu, Hotmail, and Skype.

But now the next Draper generation is readying its coming-out party. Three of Tim's four kids--Jesse, Adam, and Billy--are entering the startup game. Unlike many twentysomethings who put it all on the line to make the techie pilgrimage west, the Draper kids have Silicon Valley in their breeding. They have inherited connections and wealth from their father and grandfather; and yet they are wired with the Silicon Valley worldview of individualism and relentless optimism. "We've just been raised with this anything-is-possible mentality," says Tim's youngest son, Billy, who went to prep school at Andover. Each kid is now making a play in a different industry: Jesse's going for media, Adam for finance, and Billy for marketing. Silicon Valley observers like TheFunded's Ressi says there's little guarantee that these Drapers can extend the Draper dynasty. "The only way you can have a dynasty in Silicon Valley is if every generation is exceptional," says Ressi. "You've had a unit of two with the Drapers, which is rare."

According to family tradition, though, the Drapers reside on the side of good fortune. "We have this thing we call the 'Draper luck,' " explains Tim's sister Becky, who once briefly dabbled in venture capital. "If we get a good seat on an airplane, or whatever random thing, we chalk it up to Draper luck." She adds, "It's like our ice cream didn't fall on the ground."

If you're connected to the Draper family, you simply must attend the Valley Girl holiday party, a bat mitzvah-type blowout at Atherton's posh country club, the Menlo Circus Club. "Valley Girl" is the alter ego of 28-year-old Jesse. It's also the name of a web series in which she interviews Silicon Valley A-listers such as Elon Musk and Vinod Khosla, getting them to do wacky stuff, like eat escargot (said Jesse to Musk: "Look at that S car go!"). "We're trying to be the Ellen DeGeneres of business," Jesse, who studied theater at UCLA, tells me. In a hot-pink dress cropped mid-thigh and 4-inch silver sequin platform heels, the party hostess towers well over 6 feet tall.

The Valley Girl Bash: Adam clad in the requisite pink.

The Circus Club is where Jesse grew up playing tennis, like her father. In the past, it has hosted the more formal holiday parties of Draper Fisher Jurvetson, but tonight, with scantily clad female Santas cage-dancing by the DJ and pink glitter dripping from the sushi, taco, and cotton-candy stations, the room has been transformed into Generation Draper 4.0. The 275 guests are a collision of old and new Silicon Valley. The publishing entrepreneur Tony Perkins, Tim's childhood friend, is here. And so are thirtysomethings from BitTorrent, Sequoia Capital, and Square, as well as high-school friends who became venture capitalists. Katie Anderson, a lanky blond childhood friend of Jesse's, says that growing up in a famous, wealthy family was no big deal for Jesse. "That's the thing about growing up in Silicon Valley. No one's famous and no one's rich . . . because everyone's famous and everyone's rich," says Anderson. "So no one realizes, Oh, not everyone celebrates ski week?"

MC Hammer is mingling with the crowd too. "The Drapers are historically known throughout the Valley," says Hammer, who was a guest on The Valley Girl Show web series--not to mention an early investor in Square. The former rapper met Tim a decade ago, at the house of another billionaire VC, Ron Conway. More recently, Hammer attended Tim's 50th birthday party, where Tim dangled from the Circus Club rafters with Cirque du Soleil acrobats. Hammer compares the Drapers' dominion within the Valley with the Yankees' influence on Major League Baseball. "If you've heard of venture capital," says Hammer, "you've heard of the Drapers."

Like many startups, Valley Girl was launched in a garage--except that the garage was in her family home. Growing up the daughter of Tim Draper meant alpha-testing new technologies such as AOL Chatroom and Skype; traveling with Dad meant going "to Estonia to go to a Skype board meeting when I was in college," says Jesse. Four years ago, she started filming interviews with her father's friends, with her dad often acting as booking agent. She used her brothers as camera crew. "My brother got bored in the middle of an interview with Eric Schmidt and put the camera down on the ground," Jesse says of the show's early days. "He's like, 'My arm was tired,' and I was like, 'I'm gonna kill you. I'm gonna kill you.' " She bootstrapped the production with $50,000 she earned starring as the ditzy babysitter in a Nickelodeon show, The Naked Brothers Band, created and produced by her Aunt Polly.

For this year's season, the fourth, Jesse is able to get guests like Sheryl Sandberg on her own. Valley Girl gets about 2 million views each month, via everything from YouTube and Roku set-top boxes to Indoor Direct, which serves programming to Taco Bell and Denny's. By next year, she hopes to land a TV deal with one of the major networks. In the meantime, she's working with a publisher on a Valley Girl book series.

This is the essential contradiction of the Draper family: Tim's kids "do their own thing," as he puts it, while depending on family connections to do so. It's as if the family itself is a VC firm. At the entrance of the Valley Girl party, an oversize flat-screen TV flaunts Jesse's Valley Girl logo. But then the screen shifts to a cross-promotional Draper blitz: the icon for Tim's firm; the book cover for Grandpa Bill's new memoir, The Startup Game; the logo for Jesse's brother Adam's company, Xpert Financial; even a promo for a rock album called Black Sheep, the latest offering from Polly Draper's sons. The family is one part Kennedy, one part Partridge, and one part Kardashian.

In the early 1980s, Tim Draper was bumping around Silicon Valley armed with an engineering degree from Stanford and a diploma from Harvard Business School, trying to figure out what to do next. "Eric Schmidt was just a buddy and we were just kind of looking at each other going, 'I don't know, what are you going to do?' " he recalls. "Bill Gates was just getting going, Microsoft was a little private company. Steve Ballmer and Scott McNealy, you just ran into them." As McNealy, who went on to run Sun Microsystems for more than two decades, recalls: "We were the next-generation Rat Pack of folks in our late twenties, trying to find our space and place."

Tim Draper is a study in contradictions: a contrarian who's also a member of the establishment; an engineer with great promotional skills; an iconoclast who wears a suit and tie.

Tim's place became clear when his father was appointed to run the U.S. Export-Import Bank. Before he left for Washington, D.C., Bill handed his son the keys to the family business. "Dad just set out a huge path for me, and all I had to do was go drive on it," says Tim. "I was able to go and talk to all of his friends and say, 'What would you do here?' They were incredibly helpful." Tim soon decided to start his own firm, and by the mid-2000s, Draper Fisher Jurvetson had scored windfalls with Hotmail and Skype. (Bill Draper, by then back from Washington, was also an investor.) The firm later became the founding investor in Baidu and Tesla Motors. And yet as much as Tim was following a path laid out by Bill, father and son were different creatures.

"I always say if there needed to be a new Adam and Eve, and you needed one man to move the generation forward, I would pick Bill," says venture capitalist Howard Hartenbaum. "He's intelligent, kind, in great shape considering his age, friendly, ethical, moral. He's like the Boy Scout list."

Tim is the Boy Scout gone wild. "He's always been a daredevil," says Bill of his son. "He kind of enjoys life straight up," explains Tim's sister Polly, the raven-haired actress best known for starring in the 1980s hit Thirtysomething. Indeed, Tim operates purely on impulse. Several years ago, when Polly wrote a script about two preteen rock musicians, Tim told her he'd foot the bill to shoot the film, especially if he could act in it too. "I was wearing one of those sumo diapers and was wrestling a 300-pound guy," Tim says of his Naked Brothers Band character, the goofy Principal Schmoke. "Tim feels he can do anything; he does not have any restrictions," says Polly. "He says, 'I've always wanted to act in a movie,' so he goes and does it."

Several years ago Draper, who could easily be played by Mr. Big from Sex and the City in a family biopic (that is, if he didn’t just cast himself), was on safari in Tanzania when he spotted a breathtaking piece of land. “I said, I should really buy up this coastline,” recalls Draper, wearing his typical uniform of a poorly fitted suit. He was traveling with a local Tanzanian who suggested an even better locale: Lupita Island on Lake Tanganyika, the second largest freshwater lake in the world. “My wife and I had gone to Richard Branson’s Necker Island and we loved it. It’s such a wonderful island, so this is somewhat modeled after that,” says Draper of Lupita. So he purchased it and is now hawking as an exclusive resort where he plans on holding Branson-esque retreats for top entrepreneurs from around the globe.

A Well-Connected Man: Family patriarch Bill Draper (clockwise, from top left) with Pope John Paul II, Ronald Reagan, Barack Obama, Fidel Castro, and Bill Clinton. | iStockphoto (album)

Tim's impulsive tendencies have, for the most part, served him well as a VC. "I think Tim is factually wrong most of the time, especially if it's a number," says his DFJ partner Steve Jurvetson. "But when he's right, he's right in a way most people don't see." According to Stewart Alsop of the Alsop-Louie Partners VC firm, Tim has a "spray and pray" approach to investing--spray money around and pray that something hits. That may sound wild, but when paired with his father's instinct to bet on people rather than technologies, it has led him to incredible financial wins. "A doctor would diagnose him as ADD--he has one of the shortest attention spans I've ever seen," says Alsop. "But there's no rule for being a VC. The only thing you can look at is, Has he made money? Tim has made more money than I have, therefore he's a better VC than me. I only wish I had more disorder."

Jurvetson sees Tim as a study in contradictions. A trained engineer with the promotional skills of P. T. Barnum. An iconoclastic thinker who wears suits and ties every day. "A contrarian," says Jurvetson, "who is a solid card-carrying member of the Establishment, with a capital E." Also, he's a ham (unlike his wife, who prefers to stay out of the spotlight). On conference stages across the globe, Tim belts out "Riskmaster," an ode he wrote for entrepreneurs, in a broken, crackling voice. Tim believes his life's mission is to evangelize for venture capital. The DFJ network today has 30 offices around the globe--from Russia to South Korea. He has started a foundation to teach elementary- and middle-school students entrepreneurship; later this year, he is launching Draper University, a program for 18- to 24-year-olds. His next venture: trying to turn Silicon Valley into its own state. "I've already written up a constitution," he says.

To understand how the world of the Draper family works, just follow the path of Thomas Foley. Foley is a tan, angular former UCLA water-polo player who was Jesse Draper's sixth-grade valentine. He went to high school with Jesse at Menlo School, the Atherton prep school; after college, he spent three years in investment banking before returning home to Silicon Valley. In the fall of 2008, Foley decided he needed to figure out what to do next and began tapping the network he grew up with. After meeting with more than a dozen family friends to contemplate his future, he finally landed at DFJ's offices to meet with Tim. "I knew him since he was a little twerp," says Tim. Foley's idea was to create a platform that would make the capital-raising process easier for private companies.

It so happened that at that time, DFJ's limited partners were becoming frustrated that startups couldn't go public unless they were billion-dollar companies. This meant the partners had no way to create liquidity from their investments. Together, Foley and Tim came up with the idea for Xpert Financial, an online trading platform for private companies.

That Thanksgiving, Foley went by the Draper home for a visit. Tim's son Adam, then 22, was home from UCLA for the holiday break. The three men got to talking--and in that single afternoon, Adam, an English major, became cofounder of Xpert. "I brought Adam [into Xpert] because we felt that we needed to hone this thing down and I needed a good young team to make this happen," says Tim, who then connected Xpert's young cofounders to everyone from Dick Grasso, the former CEO of the New York Stock Exchange, to David Pottruck, the ex-CEO of Schwab. "What you see when you come back [to Silicon Valley]," sums up Foley, "is a stronger network than you ever could have had coming out of Harvard Business School."

Billy Draper, on the other hand, says he is doing his best not to exploit his father's network. "My dad has offered to help out," explains the 23-year-old, "but I'm avoiding that as long as I can." Like his siblings, Billy went to UCLA, where he studied film in hopes of becoming "the next Spielberg." His plan was to direct music videos and feature films, and maybe even write a TV drama that would be the equivalent of Entourage for the venture-capital crowd. But he came to the realization that his Silicon Valley instincts would never fit in Hollywood. "It just kind of felt like nothing ever got done," he says of his experience interning in Tobey Maguire's film-production house. Whenever he pitched an idea, he says, the conversation always turned to something mundane like fixing the furniture in the office. "I still thought I'd go try to work my way up in the studio system, but I just hate the L.A. mentality," he says. "And I love the Silicon Valley mentality of, Hey, I'm just going to start this thing. How can you not love that?"

Since graduation, Billy has been living at his parents' house in Atherton. He works mainly on Mobber.net, a startup, now in beta, that creates social-media flash mobs for musicians. Artists pay Mobber to get fans to tweet and post Facebook updates about their new song or video, in exchange for coupons or special access to the musician's work. Billy used money he inherited from his mother's side of the family to hire a coder in Bangladesh. "Right now I am thinking I'll be able to turn a profit before I get funding. We'll see how it goes, but yes, I'll take funding only when I desperately need it," he says.

Of course, being part of the Draper clan means there are always potential investors at the ready. "I chase Billy down once a week, saying, 'Is it ready, is it ready?' " MC Hammer tells me. "I want to invest and be in on it from inception."

As the younger generation of Drapers begin to make their way through the Valley, they increasingly swap places with their elders. Jesse has sent startups like Stik.com and Theranos to DFJ, which eventually invested in both. Adam also funnels a constant stream of startups to his dad. In fact, if the Drapers are betting on anyone to carry on the Draper dynasty, all fingers point to Tim's oldest son. "I think Adam's going to be a venture capitalist," says Bill. Foley, Adam's Xpert cofounder, agrees: "He's already on a couple of boards, already getting involved in companies. He doesn't have the capital to invest yet, but he has the bug of supporting other people and their ideas."

If Adam does end up as the next Draper VC, it would be perfectly fair to ask if the elite of Silicon Valley aren't so very different from the East Coast establishment they once fled. Typically, explains longtime Valley observer Bob Cringely, someone has to work for years on the tech side before gaining the credibility to become a venture investor. But, "the next generation tends to skip the operational role in the company," he explains. "Silicon Valley bloodlines do open doors for these people."

Still, that doesn't guarantee success. "Silicon Valley is much more of a meritocracy than traditional lines of business," says Jurvetson, the son of Estonian immigrants who designed chips before becoming a VC. "Has the founder of any major tech company been the son or daughter of another tech entrepreneur?" he asks. "Change favors the new entrant." TheFunded's Adeo Ressi puts it this way: "Meritocracy is pretty pure. Either you've done something great or you haven't. If Tim hadn't expanded around the world, and if DFJ didn't have its heyday in the sun, the dynasty would have ended."

Unlike their forefathers, the Draper kids will compete in a mature industry where innovations and startups are a dime a dozen. The VC field is cluttered with too many investors. And there is a widespread feeling among many Valley entrepreneurs that DFJ is now at the bottom end of top-tier firms, a once-great outfit that has lost its edge. So, despite all their privilege, the odds are against the Draper kids slipping into success via their gene pool.

This is a family that thrives on competition, however. It may be that a little smack talk is just what will get this latest generation rolling. "My dad and brother and Adam and Billy," says Polly, "think of business as a really fun, crazy game they're playing. They never thought of it as a desperate way to make money. They love the game of it."

Over lunch one afternoon with Tim, Jesse, and Adam, the conversation snakes back to stories of Deathball, a game Tim and his kids invented for the family swimming pool. Deathball has no rules; it has even ended with broken teeth. "I beat [my kids] whenever I could," says Tim, taking a last bite of his grilled artichoke platter. "I never let them win."

"We add rules to games too," Jesse points out. "We changed the rules for Boggle--we should rewrite the instructions. People are really confused when they come to play with us."

"What are the actual rules?" says Adam, the supposed heir, as if discovering this truth for the first time. "I think I've only played our way."

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3 Comments

  • MGroupder

    Really??? I am not sure if I should be answering you cause you can't honestly be asking. The whole shoot is about being ruffled; hence the shoe. Is that what you are taking away . Woah!

  • Napapjiri

    This family is mediocre at best, but is lucky to have had that mediocrity supplemented by generational wealth, connections and plenty of entrepreneurial innovation in the Valley.  The founders of Sequoia Capital are really a better representation of VC accomplishment.