Forerunner Ventures founder Kirsten Green’s $1 billion fund aims to expand the definition of consumer investing

September 8, 2022, 12:06 PM UTC
A woman in a green dress sits in an office at a round table with two chairs
Forerunner Ventures founder Kirsten Green.
Courtesy of Forerunner Ventures

Good morning, Broadsheet readers! Kim Kardashian moves into private equity, U.S. Open players object to a gender discrepancy in tennis balls, and Kirsten Green is redefining consumer investing for Forerunner Ventures’ next chapter. Have a fantastic Thursday.

– Running start. Forerunner Ventures founder Kirsten Green has made a name for herself over the past decade as an influential backer of top consumer brands. The venture capitalist invested in the beauty brand Glossier (valued at $1.8 billion), the travel brand Away ($1.45 billion), and the digital health business Hims & Hers (valued at $1.6 billion in its 2021 exit via SPAC).

Green celebrated the 10-year anniversary of her firm in July, and with the milestone, she’s ready to update her résumé. Forerunner’s launch coincided with—and helped create—the 2010s boom in D2C businesses, from Glossier to Warby Parker. But the playbook that built that generation of companies is no longer working quite as well for brands, which have pivoted to omnichannel retail strategies. (Glossier, where Green serves on the board, brought on retail veteran Kyle Leahy as CEO earlier this year as it pivoted away from a focus on tech and prepared to enter wholesale for the first time.)

But Green says her investment thesis was never about consumer brands; it was about putting the consumer at the center of a company’s strategy no matter its business model.

“We had this notion of building a firm with the consumer at the heart because the consumer is driving the vast majority of the economy,” she explains. Consumer spending accounts for about 70% of U.S. GDP, according to the Bureau of Economic Analysis.

A woman in a green dress sits in an office at a round table with two chairs
Forerunner Ventures founder Kirsten Green.
Courtesy of Forerunner Ventures

That’s a lens that can be applied to B2B businesses as well. Take the example of a B2B marketing company that matches influencers with brands. Green’s approach to that company would be to prioritize the experience of the consumer, or the person viewing the TikTok and Instagram partnerships influencers ink with brands. “If there’s no user there to receive the content that’s being created, the brand won’t be successful,” she explains. Green has applied that lens to her investments in the e-commerce software startup Canal and the government contract marketplace CoProcure.

A more expansive definition of consumer investing allows Forerunner to invest in additional categories—a necessity after the firm raised a $1 billion fund in February. (Green raised the fund around the same time former Andreessen Horowitz partner Katie Haun raised $1.5 billion for her own firm focused on crypto investing, making the pair among the first women VCs to raise such large sums.) “If [we saw success] in the consumer and discretionary category, how could those practices change the way we’re operating in the health care or financial category?” Green says.

The D2C cooldown may prompt some VCs to abandon consumer investing, and Green says that’s fine. “If you’re not committed to a category, it makes sense to move on,” she says.

But the Forerunner founder expects the market to heat up in 2023, noting, “There’s a lot of money in the hands of venture capitalists.”

Green considers the 10-year anniversary to be an “inflection point” for Forerunner. “I’m cognizant of the risk of becoming one of the pack,” she says. “But we have an opportunity as investors to have a diversified portfolio and not try to repeat the same playbook.”

Emma Hinchliffe

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