The State of Venture Capital from the Godfather of VC

Bill Draper: Why venture returns have fallen dramatically and will likely stay that way

(via Pando Daily)
By Carmel DeAmicis

On June 24, 2013 Naval Ravikant of AngelList famously said that there’s no such thing as proprietary deal flow anymore, an idea that terrifies many venture investors who’ve gotten used to all the good entrepreneurs coming to them.

The concept is less scary for Bill Draper, one of the earliest venture capitalists to set up shop in Silicon Valley. He remembers a time in the early 1960s before deal flow ever existed. Back then the concept of venture capital was so new, he had to go door-to-door, introducing himself to businesses like he was evangelizing a new religion. Draper would have to patiently explain what a venture capitalist was before asking them to exchange company equity for cash.

Clearly, he wasn’t bad at it. He’s even managed to stay relevant as the industry changed over the next 50 years. Over that time Draper founded three venture capital firms and placed early bets on big winners like Skype and the defibrillator.

Amid a lot of talk about how much the venture business has changed, and how much it needs to change, PandoDaily sat down with Draper to hear from one of the men who created this industry. He tells us which investment saved his life, offers advice on what industries VCs should pay more attention to, and responds to Fred Wilson’s recent PandoMonthly predictions that venture capital wouldn’t exist in 25 years.

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