Have you ever wondered how cryptocurrency investing gurus decide what projects to invest in? Tim Draper and his son, Adam, shared exactly that during a presentation at the 2018 Crypto Invest Summit in Los Angeles.
Tokens or Equity? Which Would the Drapers Rather Own When Investing in Crypto Projects?
Unlike traditional companies, where investors purchase ownership shares, cryptocurrency projects offer two different ways to invest: tokens and equity. So which one is the better buy?
The Drapers told the crowd they choose to invest in bitcoin and cryptocurrency-based companies because it represents freedom and improvement over the current, government-dominated financial system.
Adam posited that cryptocurrency is about freedom of finance, that it will shape the future of the global economy. Elaborating on that point, he shared an anecdote from when he first got into cryptocurrency. Someone told him that, eventually, the entire world will run on a single financial system, and posed a question: how will that system work?
From there, Adam said, his mind was blown wide open to the potential of cryptocurrency. To him, that single financial system will run on crypto technology.
Adam and Tim Draper speaking at the 2018 Crypto Invest Summit in Las Angeles
Tim, delivering a statement that ignited the crowd, claimed that people have become slaves to their governments through currency. Governments control currency, he said, deciding when to adjust the supply and by how much, which steers the economy and removes economic power from the hands of the masses.
Bitcoin offers an alternative, Tim continued. And because of its potential, he believes it should be left free from the SEC and other government agencies. If that happens, he said, society as a whole will become much wealthier.
Tim Draper: At the End of the Day, It’s About the People
So now that we know why the Drapers invest in crypto, the next question is: how do they decide who they will invest in?
When most people think of investing, they assume the most important factor is the potential for a return on their investment. For the Drapers, though, it’s really all about the people.
Tim told the audience that when he makes an investment decision, he wants to know if the team behind the project have the potential to build a real movement.
“Crypto is a kickstarter for a societal transformation,” he said.
“Are you doing a sociological evolution,” Tim continued, “will people get behind your project?”
Essentially, when you pitch to Tim, you have to convince him that you can change the world in a meaningful way.
Adam said he felt the same way. He said that when someone looks at a flat-performing cryptocurrency and wonders about its potential, they have to really understand the teams behind these projects. The coin might not have much upward movement now, but if it has a solid team, there’s a good chance it could become something great.
Additionally, when given a choice between betting on the government or the people in cryptocurrency, Adam said, “I would bet on people in crypto every day.”
Explaining his choice, Adam told the audience that he has never felt helped by the government, but the people in the crypto world create revolutionary things every day.
Adding to that, Tim said he chooses cryptocurrency because of its security. While banks continue suffering massive hacks, bitcoin has yet to be touched by an attacker.
“Bitcoin, that’s my secure currency,” Tim said, explaining that he’s holding