Snapchat just filed its paperwork to go public. And its 26-year-old CEO isn’t the only one who’s about to get paid.
Lightspeed Ventures was the first venture capital firm to invest in Snapchat, and it owns a meaningful chunk of the company.
Lightspeed found the startup thanks to one of its partners, Jeremy Liew. And in March 2012, Liew’s Facebook profile picture was of himself and US President Barack Obama.
He didn’t know it at the time, but that picture would help him land a crucial early stage investment.
When Liew first found Snapchat, the disappearing photo app had fewer than 100,000 installs. Liew’s VC partner had seen it on his teenage daughter’s phone. She told her father there were only three apps high school kids were using: Angry Birds, Instagram, and Snapchat. Liew was familiar with the first two. But he had never heard of Snapchat.
The comment was enough to pique Liew’s curiosity. He made it his mission to find out who was behind the mysterious app.
Liew did a Google search and came up dry. No articles had been written about Snapchat. There was no contact information on the startup’s website except for a generic email address. Liew messaged it and heard nothing back. Liew looked up the company on LinkedIn and sent a message.
Again, there was no response.
Determined, Liew did a WhoIs lookup on the domain name, Snapchat.com. It had been registered by Toyopa Group, the former parent company of Snapchat. Spiegel had named it after the street his father lived on, Toyopa Drive.
Liew did a Google search for Toyopa Group and found Evan Spiegel’s name. He was a student at Stanford, where Liew had also gone to school. Liew was able to message him on Facebook through the Stanford alumni network.
When Liew sent the Facebook message, Spiegel finally replied. He wasn’t looking to raise a round of financing; Liew was fine with that. Liew invited Spiegel to meet him at his office on the most famous street in the entrepreneurial world, Sand Hill Road in Menlo Park. A few feet to the left sits Greylock Partners, Sequoia Capital and Institutional Venture Partners. To the right sits Khosla Ventures.
During the meeting, Spiegel shared his vision for Snapchat. Facebook, he said, was a place where you could share superficial feelings with the world. It was for sharing times when you were happy, confident, and enjoying life. But what about all the other times when you were sad, feeling crazy or even depressed?
Spiegel felt there should be a place where intimate feelings could be expressed privately via fleeting messages. After all, true friendships are formed when people share both positive and negative experiences. And negative experiences can’t be housed on a public, identifying platform like Facebook.
Spiegel’s app hadn’t been downloaded many times, but engagement metrics were strong. “People were using it like crazy and staying for a really long time,” Liew recalls.
Eventually, Spiegel let Lightspeed invest in his company. It was the only investor in a $485,000 seed round, which Spiegel raised in May 2012. He was still three classes shy of graduating. On Thursday afternoon, Snapchat filed for a $3 billion IPO.
Liew later asked Spiegel why he returned the Facebook request and none of his other messages.
“It was because you had President Obama in your profile picture,” Spiegel said.
“There’s serendipity involved in all this stuff,” Liew said.