A legendary venture capitalist who made early investments in Twitter and Skype explains why he turned down Netflix — and what he learned from it

Ramin Talaie/Corbis via Getty ImagesDraper’s hesitancy to invest in Netflix is part of a larger trend in his investment decisions, he told Entrepreneur.

No investment decision haunts legendary venture capitalist Tim Draper like his choice to turn down the opportunity to become an early investor in Netflix.

In a recent segment of Entrepreneur’s The Playbook, the 61-year-old investor said he initially didn’t understand why Netflix CEO and cofounder Reed Hastings wanted to start out mailing DVDs to customers when the technology for streaming was only a few years away.

“[Hastings] said, ‘They aren’t ready for that yet,'” Draper told Entrepreneur. “I went, ‘Yeah, why don’t I just wait for that?’ Huge mistake. Enormous mistake.”

Draper’s hesitancy to invest in Netflix is part of a larger trend in his investment decisions, he told Entrepreneur.

“My failures tended to be failures to act,” Draper said. “Those are the ones that really kill me.”

Read more: A billionaire venture capitalist who made early investments in Twitter and Skype says there’s a single question he asks himself when deciding which companies to invest in

Business Insider’s Lydia Ramsey previously reported that another top venture capitalist, Annie Lamont of Oak HC/FT, advised that VCs make the best investment decisions when they focus on startups in one industry.

“In any industry, particularly in venture, have your lane – have something you know better than anybody else,” Lamont said. “You’ve got to pick your spot. So I picked my spot, and that was going to be healthcare.”

While many of Draper’s investments are in technology, he has also invested $US500,000 in fraudulent blood-testing startup Theranos and Bitcoin. He lost $US250,000 in his first investment in Bitcoin before making over 40 more successful cryptocurrency investments that are now worth between $US350 million and $US500 million, according to Forbes.

While Draper admitted to Entrepreneur that he has made numerous mistakes as an investor, his biggest regret is still not taking a chance on Netflix.

“That one that really irks me because it was completely my fault,” Draper said.

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