Honesty and open government create wealth and so the more honest and open a government is, the wealthier that society will be, says Tim Draper, prominent venture capitalist and founder of Draper Associates, DFJ, and the Draper Venture Network.
Draper, ardent advocate for Bitcoin, Blockchain and cryptocurrencies, and speaker at an event hosted by venture capital firm U First Capital in Palo Alto, Calif, told indica on the sidelines of the event, “I am hoping Modi becomes the honest politician, but when he shut down Bitcoin I thought he is going back to the old ways.”
U First Capital provides venture capital to mid-sized and large corporations by bringing external innovation in their specific areas of interest. Its clients include Dow Dupont (a Fortune 500 corporation), Ricoh, Hyperloop and FedEx Institute. U First Capital also partners with the Silicon Valley accelerator of the University of California, Santa Cruz, in a variety of sectors like cybersecurity, internet of things, artificial intelligence and fintech.
Draper through Draper Venture Network tied-up with India’s Blume Ventures in 2007 to enter the Indian market but pulled back in 2013.
He recalled that he was in India when Modi transformed the currency by demonetizing high-value notes on Nov 8, 2016.
“I thought it was a good move; he is getting rid of corruption and trying to create a corruption-free state,” Draper said, “but by blocking Bitcoin, he is creating more corruption and I think that is very dangerous for the country.”
He was excited, however, that Modi in his second term as Prime Minister is promoting a startup ecosystem and said his show Meet the Draper is viewed by millions in India. “It’s an exciting time for India and there are a lot of entrepreneurs and it’s fantastic,” the venture capitalist said.
Draper said Modi should have advocated for Bitcoin; it would have showed that India is ready to grow up and open up to new technologies. “Modi could have said what we can do with it, instead of saying let’s keep the old corrupt ways,” Draper said. “Who wants to use the rupee? It drops 20% a year in value. It doesn’t make any sense.”
Draper said the reason he pulled out of India in 2013 was because “I thought it was getting corrupt. With demonetization, I decided I will go back and start investing.” But he could not decide now what India is thinking, he said, leaving him “a bit torn”. “I love the team I got in India,” he said.
The investor said the startup ecosystem in India is terrific and so are the technology and education, and blamed the rise in unemployment on government interference. “When you don’t have freedom, this is what happens,” he said. “When government puts a lot of regulations in, they corrupt society and you end up with people on the street like we have in San Francisco [referring to the rise in numbers of homeless].”
Asked about Modi’s bullishness on growth and his declared target of taking India to a GDP of $5 trillion by 2025, Draper said that would not happen until Modi got rid of corruption and encouraged new technology like Bitcoin and smart contracts. “If he doesn’t, people are going be afraid to try new stuff and nobody is going to do anything grand and you are going to have more unemployment,” he warned.
He said Indians coming to the US have vision and are entrepreneurs. “Indian entrepreneurs who get to America, clearly they got something extra, because they are extraordinary,” said the man who was among the early-stage investors in Hotmail, Tesla and Skype.
Draper is also a fierce advocate of free speech and has invested in Unstoppable Domains, a company set up to make cryptocurrency transactions easy and launch “uncensorable websites”.
Draper received a Bachelor of Science from Stanford University with a major in electrical engineering and a Master of Business Administration from Harvard Business School. He also runs Draper University.
Ekta Dang, CEO and Founder, U First Capital, commenting on Modi’s $5 trillion dream told indica that the goal is audacious but achievable if the right pain points are picked carefully and addressed.
To achieve the goal, the Indian economy needs to grow by at least 8% per annum against the 5% growth it is currently achieving. To do so, the government needs to bring in new technologies and promote digitization- and automation-driven efficiencies, especially in state entities.
In addition, investment in infrastructure has to grow as this creates the backbone for economic growth. Regulatory hurdles need to go, she said, holding the former Soviet republic of Estonia as a role model.
In addition, she said, the Prime Minister will have to work out a way to reduce oil price volatility since India has to import more than three quarters of its requirement of oil.
Among the attendees at the event was Ajay Jotwani, cofounder & CEO, i2Chain, Inc. Referring to Draper, Jotwani said, “Tim Draper’s passion for technologies to drive a free market and free will is inspiring.
“i2Chain’s use of advanced cryptography, adaptive heuristics and immutable ledgers to secure identity information and establish a permanent trace enables enterprises to execute their digital strategy with integrity and confidence.”