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VC Jeremy Liew on the Biggest Pitch Mistake He's Seen, and It's a Doozy Plus, why you should never cram too much information into your initial pitch.

By Lydia Belanger

Opinions expressed by Entrepreneur contributors are their own.

Steve Jennings / Stringer | Getty Images

Most startups seeking funding will never land a meeting with a venture capitalist. However, most founders will have to sell their idea to someone, be it a partner or new customer. Whatever the situation, some basic guidelines apply when looking to get the right people on board.

Jeremy Liew has been a partner at Lightspeed Venture Partners since 2006, and he's most well known for being the first investor in Snapchat. He's backed dozens of companies throughout his career, and his current investments include Stitch Fix, Honest, Blockchain, Bonobos and more.

Related: Shark Tank's Lessons in the Art of Negotiation

He also stars on Apple's new pitch competition show, Planet of the Apps, providing feedback to entrepreneurs and their celebrity mentors.

Liew has witnessed his fair share of pitching faux pas, but he also sees his meetings as learning opportunities for himself. He's not necessarily looking for products and services that match his worldview -- rather, he often finds his perceptions challenged by what entrepreneurs bring to the table.

He recently took the time to share some advice with Entrepreneur about developing and presenting business ideas, the importance of balancing perseverance with flexibility and why the process of getting to know someone doesn't change all that much whether that person is a potential friend or funding source.

This conversation has been edited for clarity and brevity.

What do you look for to determine whether a company shows promise?
We believe that consumer technology has really become popular culture. That's very different today than it was when the internet was first around 20 years ago, and it was very much an early adopter kind of technology. But today, consumer technology is very much popular culture, and the early adopters of popular culture are young women. And popular culture comes from, not Silicon Valley, where we live in a bubble, but it comes from LA and New York and Atlanta and Chicago and Miami. It's this distributed thing that bubbles up.

I think one of the things that's kind of exciting, and one of the reasons that we [at Lightspeed Ventures] got excited about Planet of the Apps, is that it enables us to get exposure to a set of entrepreneurs that is very geographically diverse. And because of that, you're seeing ideas and opportunities that you wouldn't necessarily see from a Silicon Valley entrepreneur.

One of the core things that we expect from an entrepreneur is to have a unique insight. We think that you get a much better look at these unique insights from entrepreneurs when they're coming from a more diverse and distributed set of people.

Related: How a Group of Ecommerce Veterans Launched Hollar, an Online Dollar Store, and Hit $1 Million in Monthly Sales After Just 5 Months

The second thing that we look for is a product that creates new habits. It's not enough for you to like an app, or an ecommerce website or a service, and use it one time. For that company to be truly successful, it does need to become a habit, which means that you don't think about using it. It's not a conscious decision about, "Should I do X?" If you need money, you don't make a conscious decision about where you're going to get money from. You go to an ATM. If you're with your friends, you don't make a conscious decision about which app you're going to use. You use Snapchat.

This idea that you can create these habits, that's incredibly powerful, because that longevity, that engagement, that intention is what drives a lot of the long-term value to companies.

And then the third thing that is important is to have a scalable, repeatable way for people to find out about you. Oftentimes that's one of the most difficult things to do in the consumer world right now, because it's so crowded. There are so many apps, there are so many ecommerce websites, there are so many ways that people can spend their time, so breaking through all of that clutter can be very difficult. Companies that are able to do that by having a specific vector really differentiate themselves.

One of my partners talks about Normandy vs. Paris. Back in World War II, the big idea was to get to Paris, but to get to Paris, you had to land on Normandy first. It's this idea that you have this specific vector so you can start to gain attention. You don't have to get to the big idea right away.

What are some of the traits of successful founders or businesses?
I think we oftentimes look for the grit. The path to success always zigs and zags. When people retell the story, it's like this continuous upward path. But the reality is that every successful company has multiple near-death experiences along the way. You either have an entrepreneur who can fight through that, or people who are more inclined to just give up. There are so many opportunities to give up. Grit and stick-to-it-ive-ness is something definitely that we are very focused on.

And then just flexibility. People who have that ability to deal with ambiguity, because there's just so much of it in the early days of a startup. If people are looking for certainty, they can get really paralyzed.

Related: VCs Share 3 Secrets for Mastering Any Niche

What guidelines or tips do you have for the pitch itself?
Oftentimes, an entrepreneur will approach a pitch trying to ensure that you completely understand their business. And that's a very understandable objective to have, but I think it's a little bit misguided. In that first meeting, success is getting a second meeting. In the second meeting, success is getting a third meeting.

Over time, over the process, people will start to really understand your business a little bit deeper. There's no way that you can communicate all of the subtleties and nuances and complexities of your business in a single first pitch meeting. So, all you can do is make sure that they get intrigued enough that they want to take a second meeting to learn more. If you are trying to construct a presentation or a pitch to educate someone about your business, you'll go about it very differently than if you were just trying to hit the highlights and cause people to lean in and say, "tell me more, tell me more, tell me more" and want to have that follow-up.

What's the biggest mistake someone has made in a pitch meeting?
The biggest mistake that anyone's ever made, in a genuine, legitimate pitch, where they were raising millions of dollars for a company that was doing reasonably well was -- and I don't want to name this person, but -- they were visibly high and smelling of marijuana. You know, people can do whatever they want on their own time, but that just showed such remarkable poor judgment for a pitch meeting. They needed to kind of, you know, comfort themselves and reduce any anxiety, but that just seemed like a really bad decision to me. And that poor judgement probably would be propagated in other aspects of the way they ran the company.

The company has raised literally tens of millions of dollars and has done very well, so I may well have been wrong about that, but that was definitely something that surprised me.

When you talk about getting a second meeting, I think that not a lot of people would understand how to establish a rapport with an investor that isn't just superficial or transactional in some way, or how to really get an investor's attention and become part of their network. Do you have any advice about successfully building a more meaningful relationship?
With the nature of the interaction, it's actually hard for it not to be transactional at the beginning. I mean, these are two people who don't know each other, and so it's just like if you met somebody in a business environment for the first time or a social environment for the first time. The rules for building a rapport are pretty much the same.

A relationship gets built over the course of many months, many meetings, many interactions. I really don't think that there's a shortcut for that. I think that's true not just for investment conversations but for many relationships.

Related: When Investor Likability Can Make or Break a Deal

I think sometimes people consider themselves expert networkers or connectors, and they try very hard to force this friendliness up front vs. letting things happen organically and keeping things professional.
A professional investor isn't going to get excited about investing in you because they think you're a great person or that you're funny or witty or anything like that. But they might get really excited by your enthusiasm for the business, which is a little bit of a different vector. And hopefully every entrepreneur shows that enthusiasm for their business. In the absence of that, it's a little bit worrisome.

Going back to what you said about how popular culture comes from all over, I know that you also travel a great deal. Is there anything you've seen in your travels that has helped you to spot a new trend on the horizon? Or something you're excited about that you wouldn't have seen or known about without being exposed to people from a variety of geographic areas?
As venture capitalists, we're editors, not writers. If we're seeing trends, that's helpful, but really, we learn about these trends and opportunities because the entrepreneurs tell us. They're the ones who have the insights, and our job is to be open-minded enough and pay enough attention so that we don't dismiss their insights and so we really give them due credit. The ones we get convinced around and believe in, we invest behind. The travel is not to gain insights on our own, it's to meet entrepreneurs who have the insights.

Is there a specific insight that you've gleaned from an entrepreneur recently that made you go, "Wow, this is an area I really should be taking a closer look at?"
I mean, every investment comes from an insight of some sort. Let's take -- we invested in Giphy. Giphy's a leader in the GIF space. And, as I think we've all seen now, GIFs are a core mechanism whereby people express themselves and show individuality and emotion through messaging. That was a very new insight when we first met the entrepreneur several years ago. At the time, people were saying, "GIFs are this silly, frivolous thing. They've been around since the internet was invented and they're almost 25 years old. I don't understand why GIFs are being used now in a different way." And he had this insight which was, as people move more toward messaging to communicate with one another, messaging is good for utilitarian communication, it's bad for emotion and context.

He pointed out that historically, people have hacked that through a variety of mechanisms, whether it was through emoticons or emojis, they were trying to find ways to convey emotion through messaging. His perspective was, emojis are great, but there's a fixed alphabet of emojis, so it's hard to be really distinctive. The advantage of GIFs is that there are basically an infinite number of them, because every piece of popular culture that's ever existed has created a whole set of these GIFs. It allows people to be much more expressive, so that if someone is trying to say "I love you" to their husband, or to their child, or to their best friend from college, they can do that in different ways that are relevant to them and relevant to each other. They can use a clip from a movie they saw together, or their child's favorite show or whatever it is. That becomes much more self-expressive and personalized and emotional, and that has been the thing that's been missing from messaging.

And I was just sitting there listening to him saying, "Wow, that totally makes sense. It was not obvious to me before. You've made it obvious to me. You've explained a phenomenon that people were dismissing," which, when you see the user behavior, but you don't understand the "why" of it, it's easy to not pay enough attention to it. When you understand the "why" of it, you can start to see the through line and say, "This is a huge opportunity. I understand what you're trying to do here, and we would love to help you make that happen."

Related: How Do You Pronounce GIF? It Depends on Where You Live.

What have you learned about recently, either in a pitch or a conversation, that's surprised even you, someone who has met so many entrepreneurs?
We recently invested in a company called Zola. Zola is an online wedding registry, which is a category that hasn't really been innovated on in the online space for a long time -- probably 20 years.

The folks from Zola had this really clever insight: Wedding registries is one of the very few categories in which people don't price shop. There's no price comparison. Even if Amazon is offering that same item for cheaper, if you go to a wedding registry and you see a silverware set, you're not going to go buy that same thing from Amazon for 5 percent cheaper, because if you don't buy it from the registry, then they might get more than one of the same thing. That was an amazing insight, because you could actually take on and beat Amazon in the registry business, whereas it's really hard to do in most other categories. Now, if they could focus on creating a better user experience, to not have to worry about being 5 percent more expensive than Amazon -- you could still win and beat Amazon. And they have been able to demonstrate that they were growing really nicely and delighting soon-to-be husbands and brides through their registry experience.

Also, the fact that the millennials who are getting married now are thinking about their registries very differently than people have historically. It's less about the Le Creuset pot and it's more about experiences. They are looking for people to help fund their honeymoon or much more experiential-driven kinds of things, which, again, is an area where you can compete with Amazon, because that's not what they do.

Lydia Belanger is a former associate editor at Entrepreneur. Follow her on Twitter: @LydiaBelanger.

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