In one month, we'll be heading down to Santa Monica for our annual Vator Splash LA event. As always, we'll bring together the investors and entrepreneurs who are driving innovation, particularly in LA. One person, who doesn't live in LA, but whose major investments have been in LA is Jeremy Liew, Partner at Lightspeed Ventures. Liew is also one of the best-dressed VCs I know.
Liew, who's been investing for the last nine years, invested $485,000 in LA-based Snapchat in 2012, when it had a pre-money valuation of $4.25 million. At the time, it was a "typical seed deal," said Liew. Indeed, that valuation sounds very average. What Liew saw was "good adoption, engagement and growth." By May 2012, Snapchat was serving up 25 images a second.
Liew, who lives in San Francisco with his wife and two kids (boy and girl) and heads down to LA once a month, also invested in LA's other high-profile and fast-growing companies, The Honest Company, and Whisper.
Why does he invest so much in LA? "We live in a bubble in the Valley," Liew said. "Our view of what’s exciting is informed by what’s happening around us. There’s an awful lot of food and delivery businesses. LA seems to be more in touch with the rest of America. That's [probably] because it's been developing programming for America."
Liew does two to three seed deals a year, across seed, Series A and Series B rounds. A recent one was Venice, Ca.-based Little Labs, which received $2.15 million in a seed round of financing this past May, from Lightspeed, along with New Enterprise Associates and Lowercase Capital. It received earlier funding from Amplify LA and Crosscut Ventures, which invested $850,000. Little Labs is a studio developing smartwatch apps. "The only way you can learn about these markets is to be in them," he said. "We invested in the high-quality team and market."
But these days, more investors are competing to be "in" these markets, causing valuations to become a bit robust. Liew calls it "valuation creep." Despite the higher valuations across the board, Liew ignores signs in the later-stages that the market may be overheating. "I focus on early-stage investing," he said. "I don't have a perspective on billion-dollar valuations."
Very well. But he does have a perspective on what happens when those billion-dollar valuations are cut in half, at least in the short term. We'll be sure to ask him what happens when the music stops, even temporarily.
Join Jeremy and other amazing speakers at Splash LA on Oct. 15 at the Loews Santa Monica Hotel. Register here.