Capitol Journal: Venture capitalist Tim Draper takes another swing at reform

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Maybe the third time will be the charm for Tim Draper. He already has swung twice and missed.

The Silicon Valley venture capitalist pushed hard last year for his unworkable idea of splitting California into six states. It was a favorite of cartoonists, comedians and columnists. But he failed to collect enough valid voter signatures to place it on the ballot.

He spent $5 million on that venture.

In 2000, Draper did put an initiative on the ballot to provide taxpayer-funded, $4,000 vouchers for parents sending their kids to private schools. At one point his effort smacked of vote-buying, offering valuable prizes — computers, shopping sprees — to people who recruited the most supporters.


But Californians soundly rejected the measure. It received only 29% of the vote and cost him $20 million.

Draper, 56, won’t say whether he’s a billionaire. Regardless, he has tons of money to spend on what he considers government reform.

Now he has another thought. He calls it “venture governance.” Draper has established a website,, that invites people to submit ideas about how to make California government “awesome again.”

In venture capitalism, an investor backs promising start-ups, gambling they’ll someday return a fortune. Draper’s new idea is for him and a panel — he hasn’t named it yet — to select innovative proposals for fixing government and then financing them as ballot initiatives.

So although Draper’s past ideas were losers, he’s betting that other people will come up with winners.

It’s what California’s initiative system was set up for a century ago, he says. Citizens could bypass the calcified, cowering politicians in Sacramento and enact their own laws.


Nice theory. But soon after its inception, the initiative became a handy tool for moneyed interests — business and labor.

If Draper’s latest project can avoid becoming a host for leeching interests, it might fill a void articulated to me last week by state Sen. Bob Hertzberg (D-Van Nuys), a veteran politician and policy wonk who is pushing uphill for tax reform.

“Sacramento is not a marketplace of ideas,” Hertzberg lamented. It’s a place, he said, where interests fight to cut themselves a bigger slice of the pie or, at least, maintain the status quo.

Draper wants to create the marketplace.

“I realize that not everyone was a fan of Six Californias,” the investor said up front in his prepared announcement last week.

“But most people agree that something needs to be done to fix the state. That’s why I’m asking Californians if they think they have a better idea. If so, I want to hear it. If you have an idea that will transform government, bring it to me and maybe we can get it on the ballot.”

Good ideas, I’ve always figured, are a dime a dozen. You can find them in any faculty lounge and on most bar stools. What’s scarce is the necessary political leadership to implement those ideas. But perhaps someone who has millions to burn can lead with his wallet.


It also has always peeved me that so many people who criticize government refuse to run for an office where they’d have some power to change things. Often it’s because they’d have to sacrifice income. That’s understandable. But when they do run, they too often insist on starting at the top as governor. Successful people, especially, feel it’s beneath them to climb the political ladder.

Draper, a third-generation venture capitalist, grew up as a public policy junkie. His father was chairman of the Export-Import Bank and headed United Nations development programs. His grandfather led the Marshall Plan’s European economic recovery after World War II and was an undersecretary of war and undersecretary of state.

“I had many discussions with my grandfather talking about his past and current missions,” Draper recalls.

But Draper — a Republican most of his life, now an independent — flatly dismisses any thought of running for office.

“I’ve seen a lot of great governors in California,” he says. “I liked them from both parties. But for some reason they have been hamstrung. The system has very strong inertia.”

Anyway, he told me, still wearing a six-state tie, “I don’t know how Sacramento works.” Just, he adds, that it doesn’t work well.


“Do you believe our government is keeping up with the times?” he asks. “Do you think our education, our corrections system, our infrastructure are top of the line? I don’t. Change in government needs to start the same way any start-up is created: with an idea, a passionate entrepreneur and a few enthusiastic constituents.

“Like Skype changed communications, Hotmail changed mail, Tesla is changing automobiles, some entrepreneurs will change government. Our government is living in the past in a fast-changing world. Venture governance can help it adapt.”

Draper’s dad was an early investor in Skype. Draper helped make Hotmail successful.

Nearly 100 ideas were submitted to Draper’s website within the first 48 hours. Most proved the adage about there being nothing new under the sun.

One, not surprisingly, suggested abandoning Gov. Jerry Brown’s bullet train and shifting the billions into building desalination plants. An oldie and a goodie.

But a few new gems probably will show up.

After two misses, this third Draper swing shows home run potential

Twitter: @LATimesSkelton