Rising Above the Noise in Consumer VC with Kirsten Green of Forerunner | E1961
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Todays show:
Kirsten Green joins guest host Mark Suster to discuss Forerunner’s framework on making investments (8:33), how AI will change how consumer companies and applications are built (16:28), cultural shifts that are investable (33:38), and more!
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Timestamps:
(0:00) Kirsten Green joins guest host Mark Suster.
(2:49) Kirsten’s advice to stand out in consumer venture with only seven percent of VC dollars being allocated to consumer.
(8:33) Forerunner’s framework on making investments.
(11:16) Vanta - Get $1000 off your SOC 2 at http://www.vanta.com/twist
(12:09) The value of searching for where businesses are missing the mark, and the “wow” factor of the Oura Ring.
(16:28) How AI will change how consumer companies and applications are built
(19:46) Oracle - Take a free test drive of OCI at https://www.oracle.com/twist.
(20:50) The current state of the consumer search experience and the power of personalization that AI can bring.
(24:16) The disruptive lesson from mobile and the next level of being context aware.
(28:24) Mercury - Join 200K startups who use Mercury to operate at their best at http://www.mercury.com
(31:57) Forerunner Ventures lives within the intersection of invention and culture.
(33:38) Cultural shifts that are investable.
(36:36) The consumer shift from large to small screen.
(40:42) The importance of the mix between direct and indirect revenue.
(42:32) Discussing the relevance of “freemium”.
(55:48) What the exit environment is like going forward.
(1:02:55) What will it take to bring back the small and mid-cap market?
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X: https://x.com/kirstenagreen
LinkedIn: https://www.linkedin.com/in/kirstengreen/
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LinkedIn: https://www.linkedin.com/in/marksuster/
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How Kirsten Green Built Forerunner Ventures
Kirsten Green is the founder of Forerunner Ventures, a venture capital firm that focuses on understanding the mindset of the modern consumer. Kirsten started Forerunner in 2010, and was an early investor in companies like Faire, Chime, Warby Parker, Dollar Shave Club, Hims, Glossier, Jet, Bonobos, HotelTonight, and The Farmer’s Dog.
This episode takes us behind the scenes of Kirsten’s two decade journey building Forerunner from scratch. She talks about her biggest mistakes, wins, and lessons learned along the way.
Timestamps:
(00:00) Intro
(02:50) Doing market research at the mall
(08:00) Her journey from public markets to venture
(18:30) Lessons from her first investment going to $0
(28:51) How she raised her first $5m angel fund
(31:11) Transitioning to a $41.7m institutional fund
(43:20) Why she almost didn’t invest in Dollar Shave Club (sold for $1.1 billion)
(51:05) How Forerunner thinks about fund size
(57:05) How she led Faire’s Series A with a small fund
(58:46) How Kirsten builds relationships with LPs
(01:02:10) Is consumer investing dead?
(01:15:00) Her unfair advantage as an investor
Where to find Kirsten
Twitter: https://twitter.com/kirstenagreen
LinkedIn: https://www.linkedin.com/in/kirstengreen
Where to find Turner:
Twitter: https://twitter.com/TurnerNovak
LinkedIn: https://www.linkedin.com/in/turnernovak
Newsletter: https://www.thespl.it/
Kirsten Green - Investing in Consumer Change - [Invest Like the Best, EP.301]
My guest today is Kirsten Green, founder and managing partner at Forerunner Ventures. Kirsten launched Forerunner in 2012 and has built it into a leading consumer-focused venture firm with early investments in consumer brands like Dollar Shave Club, Bonobos, Faire, and Warby Parker. Our conversation is an exploration of consumer behavior and how to invest behind change in our society. We also discuss frameworks for identifying brands early, how to build deal flow, and the shift in power between buyers and sellers. Please enjoy my conversation with Kirsten Green.
For the full show notes, transcript, and links to mentioned content, check out the episode page here.
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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.
Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.
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Show Notes
[00:02:35] - [First question] - The insights gleaned from studying consumers in the modern era
[00:07:02] - Whether or not the shift in consumer behavior is similar to a platform shift like mobile
[00:09:58] - Which of her hypothesis going into the research was proven most wrong
[00:11:31] - The leading persona archetype that drives consumer spending
[00:13:58] - Thoughts about her investing focus after doing all of this research
[00:16:23] - How much the digital world is good and bad for community
[00:18:50] - Positive and negative impacts digital access has on children
[00:21:17] - The investing criteria that she and her firm have developed for founders and business models they find desirable
[00:32:00] - The beachhead problem for entry points, encouraging good focus and entry point selection, and who’s done it well
[00:35:33] - The history of the consumer of how they buy and sell and where the shifts in power have been
[00:39:47] - Other interesting trends she’s seeing in the seller empowerment era
[00:43:35] - How different her investing models are for linear product businesses
[00:46:45] - Frameworks she’s developed for evaluating a brand early on
[00:49:57] - The most defining moment in Forerunner’s history and the hardest lesson she’s had to learn
[00:53:13] - Ways she’s fostered and mentored young investors at Forerunner
[00:54:04] - What the most underappreciated thing is today about the consumer
[00:54:50] - User and customer development strategies that work well for early stage products
[00:56:26] - Three businesses young investors should study to educate themselves on great consumer businesses; Shoe Dog
[00:59:49] - Where they find the companies Forerunner tends to invest in, and how to build and effective deal flow pipeline
[01:05:07] - The kindest thing anyone has ever done for her
20VC: Forerunner's Kirsten Green on The Biggest Challenges Scaling Both Teams and AUM, What Truly is High Performance in Fund Management & Why Parenting and Relationships are an Enabler To Your Best Work
Kirsten Green is the Founder and Managing Partner @ Forerunner Ventures, one of the leading firms of the last decade investing at the intersection of innovation and culture. As a founder, Kirsten has led efforts to raise over $2B+ from leading institutional investors and invest in more than 100 companies. She currently serves as a board member at Glossier, Ritual, Faire, Hims & Hers, and Curated, to name a few. She has also invested in other smash hits including Chime, Jet, Warby Parker, Hotel Tonight and many more. Due to her immense success, Kirsten has been honored in Time's 100 Most Influential People and named a Top 20 Venture Capitalists by The New York Times in 2018 & 2017. Prior to Forerunner, Kirsten was an equity research analyst and investor at Banc of America Securities.
In Today's Episode with Kirsten Green We Discuss:
1.) Entry in Venture at 40 and Founding Forerunner:
How did Kirsten make her way into VC at 40 with the founding of Forerunner having never had a role in VC before?
What did everyone tell Kirsten when she was looking to break into venture? What did she tell herself when she heard this?
What does Kirsten believe she is running from? What does she believe she is running toward?
2.) Fund Management and Leadership:
How does Kirsten define high-performance today? What are the nuances of high performance in fund management?
How would Kirsten describe her leadership style today? How has it changed over time?
What have been some of Kirsten's biggest lessons in terms of what it takes to retain quality with scaling AUM and teams?
What have been Kirsten's biggest lessons when it comes to giving hard feedback with kindness?
3.) The Venture Landscape Today and Forerunner's Position:
Why does Kirsten believe the venture landscape is more dynamic today than ever?
Does Kirsten agree with the statement that venture is less collaborative than ever?
Why did Kirsten and Forerunner seem to amend strategy and move into B2B?
Why does Kirsten disagree with the delineation between B2C and B2B?
4.) Parenting, Relationships and Life:
What have been Kirsten's biggest lessons since becoming a parent? How has it impacted her mindset?
Does Kirsten agree that relationships attract from sheer input on work? How does Kirsten separate relationships into two kinds of relationships?
What does success in marriage mean for Kirsten? How has she seen that in her own marriage?
Recode Decode: Kirsten Green
Forerunner Ventures founder and managing partner Kirsten Green talks with Recode's Kara Swisher about the thinking behind her investments in companies like Dollar Shave Club and Glossier; the messy culture struggle at luggage startup Away; and where innovation comes from in today's tech industry. Plus: What are the advantages of being a female venture capitalist, and does the VC industry have to change?
Featuring:
Kirsten Green (@kirstenagreen), founding partner, Forerunner Ventures
Host:
Kara Swisher (@karaswisher), Recode co-founder and editor-at-large
More to explore:
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20VC: 2nd Most Downloaded Episode of 2018: Kirsten Green, Founding Partner @ Forerunner Ventures
Kirsten Green is the Founding General Partner @ Forerunner Ventures, where she has raised over $250M from leading investors and has invested in more than 40 early-stage companies. Forerunner Ventures is the only VC firm to invest in both Dollar Shave Club and Jet.com, two of the biggest and highest-profile e-commerce exits in recent years, and counts Birchbox, Bonobos, Glossier, Hotel Tonight, Warby Parker and Zola among its portfolio companies. She's been honored in Time's 100 Most Influential People in 2017, named VC of the Year at TechCrunch's 2017 Crunchies Awards, and is part of Forbes 2017 Midas List.
In Today's Episode You Will Learn:
1.) How Kirsten came to found one of the most successful early stage funds of the past decade in Forerunner?
2.) Question from Michael Kim @ Cendana: How does Kirsten view the optimal portfolio construction theory for a thematically specialized consumer fund? What is the one question Kirsten asks herself pre-investing in a startup?
3.) Question from David Pakman @ Venrock: Given the scope of consumer as a space, is Forerunner large enough to attain the required ownership levels? What does this mean for the future of Forerunner in terms of further funds, opportunity funds and entry points?
4.) What are the 3 core principles to developing an exciting investment opportunity in the consumer space? What commonalities do they have? What do you look for in a consumer brand founder that might be different from a software founder?
5.) Why does Kirsten believe that Amazon has done more to make the market opportunity than they have to crush it? What makes Kirsten believe we really are in the early innings for commerce? How will we see the notion of brand evolve over the coming years?
Items Mentioned In Today's Show:
Kirsten's Fave Book: Charlie and The Chocolate Factory
Kirsten's Fave Blog: TheSkimm
Kirsten's Most Recent Investment: Packagd
As always you can follow Harry, The Twenty Minute VC and Kirsten on Twitter here!
Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC.
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20VC: VC of The Year: Forerunner's Kirsten Green on 2 $Bn+ Exits in 1 Year, Why We Are In The Very Early Innings For Commerce & How Brand Has Fundamentally Changed Over The Last Decade
Kirsten Green is the Founding General Partner @ Forerunner Ventures, where she has raised over $250M from leading investors and has invested in more than 40 early-stage companies. Forerunner Ventures is the only VC firm to invest in both Dollar Shave Club and Jet.com, two of the biggest and highest-profile e-commerce exits in recent years, and counts Birchbox, Bonobos, Glossier, Hotel Tonight, Warby Parker and Zola among its portfolio companies. She's been honored in Time's 100 Most Influential People in 2017, named VC of the Year at TechCrunch's 2017 Crunchies Awards, and is part of Forbes 2017 Midas List.
In Today's Episode You Will Learn:
1.) How Kirsten came to found one of the most successful early stage funds of the past decade in Forerunner?
2.) Question from Michael Kim @ Cendana: How does Kirsten view the optimal portfolio construction theory for a thematically specialized consumer fund? What is the one question Kirsten asks herself pre-investing in a startup?
3.) Question from David Pakman @ Venrock: Given the scope of consumer as a space, is Forerunner large enough to attain the required ownership levels? What does this mean for the future of Forerunner in terms of further funds, opportunity funds and entry points?
4.) What are the 3 core principles to developing an exciting investment opportunity in the consumer space? What commonalities do they have? What do you look for in a consumer brand founder that might be different from a software founder?
5.) Why does Kirsten believe that Amazon has done more to make the market opportunity than they have to crush it? What makes Kirsten believe we really are in the early innings for commerce? How will we see the notion of brand evolve over the coming years?
Items Mentioned In Today's Show:
Kirsten's Fave Book: Charlie and The Chocolate Factory
Kirsten's Fave Blog: TheSkimm
Kirsten's Most Recent Investment: Packagd
As always you can follow Harry, The Twenty Minute VC and Kirsten on Twitter here!
Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC.
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