Tim Draper, a famous American capitalist and strong investor in crypto currencies, believes that initial public offerings, or IPOs, are not the best source of funding for companies in the industry.
The billionaire investor joined the Unitize conference on July 6 to talk about how to invest in early-stage blockchain ventures.
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Draper’s opinion on IPO
During the Unitize panel, Draper highlighted that existing regulations make it difficult for blockchain companies to go public. „I do not recommend anyone to go public at this time unless your company is worth at least $10 billion,“ said the famous investor.
Draper went on to say that it makes more sense for blockchain companies to seek out large fund investments or use some other form of fundraising, such as tokenization, for smaller investments. Draper elaborated:
„The regulators made going public so expensive that it’s not really worth it […] The biggest investments come from those big funds, and that tends to be an easier way to get your money than trying to go public.
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According to Draper, the IPO process used to be much cheaper. Companies used to go public when they were worth „$50 million or more“ and „with only $20 million in revenue“. Today, however, „it’s not worth it until you have a market capitalization of $5 billion,“ the investor said.
Investing in diversity
On the panel, Draper also supported diversity in terms of funding for new industry ventures at an early stage. Leading an early stage venture capital firm, Draper Associates and Draper Fisher Jurvetson, the investor states that factors such as country of origin, history, race or gender do not matter when choosing which startup to fund.
„If we continue to support these extraordinary entrepreneurs, whoever they are, wherever they come from, we will make the world a better place. That’s the way I see it. I tell them to come with whatever story they have, whatever background, whatever religion, whatever race, whatever sex, we are interested.
„What we are looking for are great ideas, great markets, where the entrepreneur has a lot of passion for what he is doing,“ said the investor. In supporting diversity, Draper reiterated the growing trend towards diversity in the industry. Some experts believe that the cryptomint industry has begun to exhibit more diversity than many other technological ecosystems.
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Draper is also a strong advocate of major cryptosystems such as Bitcoin (BTC). In February 2020, the billionaire investor said he has „a lot“ of his portfolio in BTC after abandoning public stocks in favor of cryptomoney just six months ago. Draper, one of Ethereum Code all-time biggest bullishers, is confident that Bitcoin will exceed $250,000 by early 2023.
Unitize is the first online conference organized by BlockShow and San Francisco Blockchain Week. Scheduled for July 6-10, the event features key industry players, including Ethereum co-founder Vitalik Buterin and Binance CEO Changpeng Zhao.