About Jeremy Liew
Jeremy Liew, a general partner at Lightspeed Venture Partners and a nine-time member of the Forbes Midas List, has been discussing his investment philosophy and approach to venture capital in a series of recent appearances. Liew emphasized the importance of pattern recognition in deal sourcing, stating that to identify a "one in a thousand company," an investor must have met thousands of companies, as "there is no substitute" for direct experience. He described the process of winning competitive deals as understanding one's "home ground advantage," which he defined as a specific domain expertise, network, or geography that gives an investor a unique edge over competitors. Liew noted that for him, this advantage was initially a deep understanding of consumer internet, a specialization that was rare when he joined Lightspeed in 2006.
Liew also spoke about the role of trust in investor-founder relationships, arguing that it is "built in difficult situations" rather than before an investment is made. He cited his experience with The Honest Company, where a prior failed investment with co-founder Brian Lee led to a strong reference because Lightspeed remained supportive even when the company was struggling. Liew advised entrepreneurs to conduct reference checks on potential investors by speaking with founders of companies that did not succeed, as "not everybody is supportive and helpful and kind when things don't go well." He added that he has made approximately 75 investments over his career, noting that while he was enthusiastic about all of them, more than half lost money, but that Snapchat and Affirm each returned over a billion dollars.
Source: AI-verified profile updated from Jeremy Liew's recent appearances.
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Transcript (7 segments)
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Interviewer0:00
Another incredible skill that you have is being able to cultivate relationships. Obviously, you were saying trust has to be earned over time after the investment is made, but to have that initial great connection to secure the meeting, to win the deal, can you tell us a little bit about the story of Honest Company?
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Jeremy Liew0:17
Yeah. So Jessica Alba is the co-founder of Honest Company, but we actually met Honest Company through the co-founder, Brian Lee. And I met Brian Lee through his first company, a company called ShoeDazzle, that he was working with Kim Kardashian. And that was his second company, because his first company was LegalZoom, which he was a co-founder of. So he's a prolific serial entrepreneur. Right now I sit on the board of his current company, Arena Club, which he works with Dar Cheetah. Our relationship with the Honest Company really started with Brian, as this extraordinary repeat entrepreneur. Incredible ideation. He really understands how to work with influencers and celebrities to match their areas of expertise and passion with a brand and product. So I think that authenticity, that connection, is what is necessary for influencer-led and celebrity-led brands. They need to believe in the product, they need to be expert in it, they need to be credible in it to their audience. All those things have to align. You can't take a celebrity and product and just stick them together. It really does have to be that authentic alignment. And for Jessica, she had been so vocal as a new mom around the need for natural, toxic-free, chemical-free baby products, skincare products, and so forth. So when she went out and started a brand in that direction, it was a very understandable and natural extension of her advocacy work prior to that. Her audience understood it and embraced it immediately, and that's what allowed it to be so resonant.
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Interviewer1:58
And in terms of winning that deal, obviously you had the relationship with her co-founder. What kinds of questions or conversations did you have to instill the confidence that you're going to not only take care of their brand, but that helped them realize?
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Jeremy Liew2:14
I think trust is earned. And ShoeDazzle was not a good outcome for us as an investor. We were co-investors there with some other firms. And I think coming out of that, Brian said, 'Hey, you know, this is a tough situation. We lost money to these guys, but Lightspeed were a great team to work with, even when the chips were down, even when they lost the money, they didn't lose their cool, they didn't get angry, they were supportive even at the end, when there was nothing in it for them at all.' So we built trust with him, and he then trusted me with Jessica. So being able to say, 'Listen, these are guys that I have lived through a very difficult situation with, and they were good, supportive investors through the end, even when there was nothing in it for them.' I think that was a large part of why Jessica chose to work with us again. And I think this is one of the interesting things, which is trust is built in difficult situations. Difficult situations don't always lead to good outcomes, but often they lead to bad outcomes. There's this old adage in venture capital that you build your returns from the successes, but you build your reputation from the companies that don't work out. That's the trust piece, right? The way that you behave with the companies that don't work out can help you win the next deal, because those people are going to be references. Every successful company will give a good reference for all of their investors, because it's easy to be a supportive investor when the company's doing well. But if you get good references from companies that aren't doing well, I think that is a real differentiator, because not everybody is supportive and helpful and kind when things don't go well. You can turn these not necessarily failures, but these things that didn't work out, and you can leverage them to position you.
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Interviewer4:07
That makes it sound more Machiavellian.
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Jeremy Liew4:09
You know, I think it is difficult times reveal character. I think it's a little bit like, it's not like, 'Oh, I'm going to be nice to you because you're going to say nice things to my next investment.' It sounds really self-serving if I say this, but this is who I am, right? And that is who that person is. The way they behave exposes character. And the references are trying to get a real read on character, right? And that's why entrepreneurs should always do reference checks on their potential investors, and they shouldn't just do the references that were provided. They shouldn't just do the references from the successful companies that they initiated. They should do reference checks on the companies that don't work out as well, because most companies will go through tough times.
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Interviewer4:55
Exactly right. Even successful ones will go through tough times.
