CEO DailyCFO DailyBroadsheetData SheetTerm Sheet

Consumer brands are taking a hit. Here’s how Forerunner Ventures’ Kirsten Green is advising founders in her portfolio

April 10, 2020, 2:08 PM UTC

This is the web version of Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.

Banks were the first to be hit in the 2008 financial crisis. But this coronavirus-induced financial downturn is impacting consumers first, with the unemployment rate likely now at 14.7% of Americans.

Many think consumer-facing brands will be the first to feel the pain as people close their wallets to wait out the coronavirus. So Term Sheet spoke to Kirsten Green, founder of Forerunner Ventures, an early-stage venture firm invested heavily in such brands.

For those new to her origin story: Green is known for turning Forerunner into one of the most successful early-stage funds in Silicon Valley, having made bets on razor delivery startup Dollar Shave Club (acquired by Unilever in 2016 for $1 billion) and e-commerce marketplace (bought by Walmart for $3.3 billion that same year). Other investments include Chime, Glossier, Warby Parker, Outdoor Voices, and Away.

Here is our conversation, lightly edited for clarity, about how Forerunner is navigating the current crisis—and if female-founded companies might face disproportionate scrutiny in the middle of what many say will be a recession.

This particular downturn is pressuring consumers. With your commerce- and consumer-focused portfolio, what are you seeing?

I don’t want to be a Pollyanna and say, “Everything is fine!” But I will say that companies in our portfolio have been more resilient than I would have thought with the magnitude of what is going on. But we’re only three weeks into it, so I think the best practice is to assume things are going to slow since it’s just too early to tell. We’ve generally been in a mindset telling founders: “Be really thoughtful about how you would navigate an extended period of general weakness, and think about how you preserve the integrity of the company while preserving cash runway.” 

Being in the travel sector, for example, puts Away in the eye of the storm. It’s extraordinary to face that level of drop-off in demand. However, it makes it clear what you need to do to preserve your company. [Term Sheet note: Away, which sells luggage, announced it would furlough half the staff while laying off another 10% amid a 90% drop-off in sales in the recent weeks.]

On the flipside, in a lot of consumer-focused businesses that are online-only, they have candidly not seen weakness yet. Consumers have been more resilient than we thought. So it’s a question of, how do we reconcile, “Oh, our customers are holding up really well,” with the overall idea that we need to hunker down and preserve runway? That’s a harder calculus to come by.

Why do you say consumers have been more resilient than you thought?

Some physical retail stores have shut off, so consumer demand has gone to online opportunities. 

I also suspect some new behaviors are being formed. For some of us, it’s probably hard to believe that some people are now discovering online shopping, but the truth of the matter is that if you just look at the Instacart story, online shopping is new for some consumers. Does that imprint in a way so that behavior gets modified even after the crisis? I think that’s probably true—and that it’s an acceleration of a trend that was already in place.

On net, do you expect your portfolio to take a hit from the coronavirus?

Fortunately, we’re coming off of a record fundraising cycle and we also had a lot of record fundraises in our portfolio, so companies have generally good balance sheets. 

Yes, I’m cautious, yes, I don’t want to show our investors our markups from last quarters in this whole new world. But I feel cautiously optimistic that we’re going to come through this with some better operations and more innovative thinking. 

Do you expect bankruptcies in your portfolio?

Right now, we don’t have a company that is on the brink of bankruptcy, but we also don’t have a crystal ball for how long this lasts and how people navigate through it. I think it’s unrealistic to think that every startup is going to make it through this—this is just too big of a deal.

Before the coronavirus, a large number of female-founded companies were under scrutiny (Brandless, Away, Outdoor Voices, ThirdLove, etc). Two of the companies that faced heavy scrutiny in reports were in the Forerunner portfolio—Away and Outdoor Voices. Do you think they were unfairly targeted?

I think when an article or two like that comes out, at first you hear the stories and think like, “Wow, this is really unfair”—you pick up the narrative of how wrong [the operations were]. But then when you get to the third, or the fourth, or the fifth—you’re like, “Wow, wait a minute, what are we talking about here?” And you bring a higher level of scrutiny to the conversation. We had enough of these articles that [it became clear that] the lens at which those businesses were evaluated were harsher and revealed some biases. That conversation was just unfolding as the coronavirus started. My hope is that people keep that in mind during an incredibly hard time for founders right now.

[On Outdoor Voices and Away]: It’s complex. I think those companies endure a lot of scrutiny and a lot of press coverage.

But people have to rise to the occasion [during coronavirus], and Away was thoughtful about that, and with how they approached talking about really tough decisions they needed to make for their business. That to me was a real sign of leadership, with the way they owned it and navigated it. And I think that’s a light juxtaposition to some of the critiques that have been made of the company in the prior news cycle.

Do you think female founders will be impacted in higher numbers during a recession?

I think too many female founders already got dinged even before coronavirus. I want to be constructive on this topic. Honestly, genuinely, I don’t have an answer—except I sure as hell hope not. It was super unfair before and it’s even more unfair now. Just think about what it’s like to be a founder navigating this crisis.

On the female founder front, I haven’t had a conversation about it in the last month and a half. I think everyone is focused on their companies and their portfolios—and maybe that’s the interesting thing. Everyone is having a hard time right now. I think this moment is a big equalizer—this coronavirus knows no gender.


- Legend Biotech, a Somerset, N.J.-based firm developing novel cell therapies for oncology and other indications, raised $150.5 million in Series A funding. New investors included Hudson Bay Capital Management, Johnson & Johnson Innovation, Lilly Asia Ventures, Vivo Capital, and RA Capital Management

Ninja Van, a Singapore-based last-mile logistics provider, raised at least $124 million in Series D funding, per reports. Brunei’s sovereign wealth fund participated. Read more.

- Cargo X, Brazilian digital freight marketplace, raised $80 million in Series E funding. LGT Lightstone Latin America led the round, and was joined by investors including Goldman Sachs Growth Equity, Valor Capital, and Farallon Capital.

- Tango Therapeutics, a Cambridge, Mass.-based biotech focused on discovering and delivering targeted cancer therapies, raised $60 million in Series B funding. Boxer Capital led the round. Cormorant Asset Management and Casdin Capital also participated.

- Paidy, a Japanese fintech allowing online purchases without credit cards, raised $48 million in Series C extension from ITOCHU.

- Kate Farms, a Santa Barbara, Calif.-based plant-based formula prescribed to deliver medical nutrition, raised $23 million in Series A1 funding. David Roux, cofounder of Silver Lake, led the round.  

- Airbrake, a San Francisco-based application performance and code-level error monitoring software company, raised $11 million in funding. Elsewhere Partners led the round.

- IFM Restoration, a Dallas, Texas-based online marketplace connecting contractors with property managers, raised $10 million in Series A funding. S3 Ventures and Brick & Mortar Ventures led the round.

- Ferrum Health, a San Francisco, Calif--based developer of an enterprise IT and AI patient safety platform for health systems, raised $9 million seed funding. Blumberg Capital led the round, and was joined by investors including GSR, Vulcan Capital, and Valley Capital Partners.

- Double, a New York-based startup connecting executives to contracted remote assistants, raised $6 million in funding. Backers include Index Ventures and Daphni. Read more.

- Seeqc, an Elmsford, N.Y.-based startup focused on quantum computing, raised $5 million from M Ventures, the strategic corporate venture capital arm of Merck KGaA

- Living Security, an Austin, Texas-based provider of security awareness software for enterprises, raised $5 million in Series A funding. Silverton Partners led the round, and was joined by investors including Active Capital and new investors Rain Capital and SaaS Venture Partners

- i2O Therapeutics, a Boston-based biotech developing an oral delivery platform for traditionally injectable biological drugs, raised $4 million in seed funding. Sanofi Ventures and JDRF T1D Fund led the round.

- RISE Robotics, a Somerville, Mass.-based startup focused on heavy machinery electrification, raised $3 million in funding from The Engine.

- Tropic, a New York-based business software shopping engine, raised $2.1 million in seed funding from Founder Collective, Company Ventures, the founders of Plaid and Flatiron Health; the CPO of Adobe Creative Cloud; and the former CEO of Seamless.

- Pepper, a direct-to-consumer bra company for women who wear AA, A, and B cup sizes, raised  $2 million in Seed funding.  Backers include Precursor Ventures, Break Trail Ventures, Kokopelli Capital, New York University Innovation Fund, Denver Angels, the Founder of Native Deodorant Moiz Ali, Cofounder of Peter Cobb, and Cofounder of MyFitnessPal Albert Lee.


- Investcorp Technology Partners plans to acquire Avira, a German cybersecurity company, for $180 million. Read more.

- Artemis Capital Partners acquired BioDot, an Irvine, Calif.-based manufacturer of automated low volume fluid dispensing systems. Financial terms weren't disclosed.

- Veronis Suhler Stevenson and NewSpring Health Capital completed an investment in BRC Recovery Family of Programs, a Manor, Texas-based provider of addiction treatment services. Financial terms weren't disclosed.

- Bernhard Capital Partners Management acquired Ascension Wastewater Treatment, the largest private sewer utility operator in Louisiana. Financial terms weren't disclosed.

- An EQT unit is looking to pull out of a NZ$$1.5 billion ($900 million) takeover deal for Metlifecare, a New Zealand-based retirement village operator, citing the coronavirus.

- CMP Group, a portfolio company of Ironbridge Equity Partners, acquired MarineTech Products, a Vadnais Heights, Minn.-based maker of marine product brands. Financial terms weren't disclosed.


- Stern Group will acquire the outstanding public shares of Asta Funding (NASDAQ: ASFI), an Englewood Cliffs, N.J.-based diversified financial services company—taking it private. Financial terms weren't disclosed.

- Sony Corp America will invest $400 million in Bilibili, a Chinese entertainment and media site.


- Oakley Capital Investments sold its remaining stake in Inspired, a London-based operator of schools in Europe, Australia, and Africa, for net proceeds of roughly £99 million. The firm previously sold a stake to Warburg Pincus.


- Next Frontier Capital held its initial close of Fund III with $40 million in LP commitments. The fund is targeting $70 million.


- Rose Park Advisors added Chris Calder as a Principal. Calder was previously at Epic VC.