Forerunner Ventures’ Long-Term Strategy: Why IPOs Aren’t the Only Exit Path
The Changing Landscape of Startup Exits
Thirteen years after its founding, Forerunner Ventures has redefined success for consumer startups. While traditional IPOs were once the gold standard, Forerunner’s portfolio tells a different story:
- Warby Parker: Went public via SPAC merger
- Bonobos: Acquired by Walmart for $310M
- Glossier: Remains privately held despite massive growth
Founder Kirsten Green sees this as strategic evolution rather than compromise. “In today’s market,” she notes, “every alternative to traditional IPOs has become mainstream.”
Billion-Dollar Bets That Defy Convention
Forerunner’s early investments in companies like Chime (fintech) and Ōura (smart rings) have yielded impressive results:
- Both founded in early 2010s
- Valuations exceeding $5B
- Different exit trajectories:
- Chime has confidentially filed for IPO
- Ōura maintains no immediate IPO plans
At TechCrunch’s StrictlyVC event, Green emphasized patience: “We’re here for the growth. With Ōura, we haven’t even discussed selling because the opportunity is so phenomenal.”
The Rise of Secondary Markets
Green highlights how venture capital has adapted:
- Extended timelines: Companies now need to reach “double-digit billion” valuations for successful IPOs
- Secondary markets: Provide crucial liquidity between funding rounds
- Price discovery: More participants create efficient valuation benchmarks
“The secondary market continues to drive our industry,” Green explained. “It allows investors to unlock returns without forcing premature exits.”
Valuation Volatility and Market Realities
The case of Chime illustrates modern valuation dynamics:
| Year | Valuation | Market Type |
|---|---|---|
| 2021 | $25B | Primary (VC funding) |
| 2023 | $6B | Secondary |
| 2024 | $11B | Secondary |
Green views this as healthy price discovery: “Public markets involve everyone setting prices. Secondaries provide that intermediate step.”
Forerunner’s Investment Philosophy
The firm’s strategy focuses on three key elements:
- Early identification: Spotting shifts in consumer behavior
- Emerging models: Pairing trends with innovative business structures
- Cultural relevance: Investing at the intersection of invention and culture
This approach has succeeded across multiple waves:
- 2010s DTC brands: Warby Parker, Glossier
- Subscription services: The Farmer’s Dog ($1B annualized revenue)
- Current focus: AI-enabled consumer experiences
The Patient Capital Approach
Green’s perspective reflects broader VC evolution:
- Extended horizons: Moving beyond 10-year fund cycles
- Flexible exits: Embracing acquisitions, SPACs, and continued private growth
- Value creation: Prioritizing sustainable growth over quick liquidity
“Great companies need time,” Green concluded. “Not all growth paths look the same, and that’s okay.”
Listen to the full discussion with Kirsten Green on the StrictlyVC podcast.
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