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Lessons Learned: Lightspeed Venture's Jeremy Liew says not every company should raise venture capital

A VC's advice on how to meet with venture capitalists

Lessons learned from investor by John Shinal
December 11, 2007 last edited July 10, 2008
Short URL: http://vator.tv/n/c3

Lightspeed Venture Partners' Jeremy Liew says entrepreneurs should approach raising venture capital the same way they would a video game that has levels of increasing difficulty.

"You can't get to the top level without going through each step," says Liew, whose Silicon Valley firm evaluates thousands of startup business plans every year. "The point of sending an executive summary is to get a meeting, not explain the whole business," he says.

Likewise, the point of a first meeting is to pique enough interest among the VCs to get a second sit-down and slowly work your way to a funding decision.

"It's a lot easier to walk up up the staircase, instead of trying to jump up and answer every question" about the business plan at the beginning of the process.

Liew, who funded Flixster and has spent a lot of time analyzing the market potential of social networks, spoke at length on that subject in the first part of his interview with Vator.tv's Bambi Francisco. 

Lightspeed Ventures manages $1.3 billion and is currently investing a $475 million fund.

Still, Liew believes that not all startup companies should raise venture capital. 

"Sometimes it's a bad fit," says Liew, who shared the example of Userplane, a maker of chat software that came to Lightspeed to raise money. Instead of funding them, Liew, a former senior VP of strategy at AOL, introduced them to John Miller, then president of AOL, which acquired the startup in 2006. 

Liew writes a blog at lsvp.wordprress.com. You can see his Vator video pitch here