Forerunner’s long game: As startups stall before IPO, all options are on the table

Forerunner Ventures has been instrumental in the success of several consumer startups over the past thirteen years, such as Warby Parker, Bonobos, and Glossier. These companies have taken alternative routes to going public, with Warby Parker going through a special purpose acquisition vehicle and Bonobos being acquired by Walmart. Glossier remains privately held, along with other brands in Forerunner’s portfolio.

Founder Kirsten Green views this non-traditional approach as a success, as the landscape of IPOs has evolved to include various alternative methods. Companies like Chime and Ōura, both early investments by Forerunner, have achieved valuations exceeding $5 billion, demonstrating their longevity in competitive markets.

Despite Chime’s confidential filing for an IPO, Ōura has no immediate plans for going public, which Green fully supports. She highlights the shift towards the secondary market for liquidity and exposure management, emphasizing the importance of adapting to the changing IPO landscape.

The reliance on the secondary market is driven by the necessity for companies to reach significant valuations before considering an IPO. This shift has altered the traditional timeline for liquidity events in the venture capital industry.

Green acknowledges the efficiency of price discovery with more participants in the secondary market, even if it results in fluctuations in valuations. The firm’s strategy of early investment allows flexibility in navigating changing market conditions and valuation trends.

Forerunner’s success lies in identifying emerging consumer trends and pairing them with innovative business models, as seen with past successes like Bonobos and Glossier. The firm continues to focus on disruptive ideas that intersect with cultural shifts.

Green emphasizes the importance of allowing companies time to grow and evolve, recognizing that not all growth trajectories follow the same path. Venture capital is adapting to a new era of patience and creativity in pursuing successful exits.

(Listen to the full conversation with Green on the StrictlyVC Download podcast for more insights on the evolving venture capital landscape.)