- Tim Draper almost missed Coinbase entirely before joining during a later funding round.
- Adam Draper wrote Armstrong his first cheque after his father, Tim Draper, passed on it.
- Coinbase returns alone nearly doubled the entire Draper Associates Fund V value.
Venture capital legend Tim Draper has revealed that he nearly passed entirely on Coinbase, one of the most successful bets in his fund’s history, and that it was his son Adam who made the first call correctly.
In a post on X, Draper recalled the moment Brian Armstrong walked into his office. He liked Armstrong immediately, but had already invested in a competing project called CoinLab, so he held back. He also convinced himself that retail crypto adoption was too far away to justify the bet.
Adam Draper disagreed. He wrote Armstrong his first cheque. His father followed shortly after, joining the next funding round. “The return from Coinbase alone nearly doubled our entire Draper Associates Fund V,” Tim Draper wrote.
Coinbase has since grown into one of the world’s largest cryptocurrency platforms, with over 120 million customers using it for trading, payments, finance, and value storage. It completed a landmark direct public listing on Nasdaq under the ticker COIN in 2021.
Armstrong responded graciously, thanking Draper and describing him and Adam as fearless and independent thinkers who make science-fiction-level bets. He also added that he is an LP in their fund.
“Thank you! I admire the sci-fi level bets you and Adam are willing to make – you are both fearless and independent thinkers,” Armstrong wrote.
Not Everyone Agreed
The post immediately drew pushback from parts of the crypto community who see Coinbase very differently.
One economist called Coinbase the worst company in Bitcoin, accusing it of listing tokens it knows are worthless to extract trading fees from retail investors, maintaining poor security practices that have led to stolen customer funds, and delivering poor customer service.
Others raised financial concerns. One commenter said that COIN stock is down roughly 58% from its 2021 direct listing price, while Robinhood’s stock has risen approximately 200% over the same period.
Draper closed his post with advice for founders who hear an early no from investors. He advised founders to seek out the next generation of VCs if established investors reject them.
Related: Coinbase Secures UK MiFID License to Expand Trading Beyond Crypto
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