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Kirsten Green Uses Data — and Her Gut — to Make Investment Decisions

Products that cater to Gen Z are a white space, Green said.

When Kirsten Green first heard about Dollar Shave Club, she wasn’t in.

Green, the founder of venture capital firm Forerunner Ventures, hadn’t seen the pitch, but was told about the concept by a friend. She wasn’t, frankly, that interested.

“I thought, ‘Oh, that’s hard,'” Green said. “I sort of went to a place where I was like, ‘That’s a fairly low-ticket item that has a really huge, big, formidable competitor.'”

Then, she met Michael Dubin, the founder of Dollar Shave Club, at a dinner. He started talking about “the guy,” and how he was changing, waking up to the ideas of health and wellness and self-care, and sneaking into his wife’s or girlfriend’s cabinet for sunscreen or moisturizer. At the same time, that guy had to go to a drugstore or mass retailer to buy any of those things, where many of the brands are passé, Green said.

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That’s when it clicked for Green. She was one of the company’s earliest investors, investing $1 million in the company for a $5 million valuation. Four years later, Dollar Shave Club sold to Unilever for a reported $1 billion.

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When Forerunner invested in Dollar Shave Club in 2012, the concept of a direct-to-consumer personal-care company was relatively new, she said. “We’re pushing the envelope further and thinking what’s next,” she said.

“We feel like our job is to stay as far ahead of the curve as we can, where it’s still relevant enough today to grab the customer’s attention in some kind of critical mass,” Green said, in a conversation with Bluemercury’s chief executive officer Marla Beck.

Right now, Forerunner is invested in Hims and Hers, a telemedicine business that gives customers access to doctors online. The thesis is that consumers are disappointed in health care, living longer and taking wellness into their own hands.

When Green thinks about investments, a few factors come into play, she said. It depends on whether the brand sends a cold e-mail or if she receives an introduction to them from a contact. “Some of it also, candidly, is what we’re looking for in our portfolio,” Green said.

Forerunner just closed a $360 million fund, and continues to look for new investments and white spaces. “I haven’t encountered a time of feeling bored,” Green said. “Gen Z is a completely white space, if you want to focus on the customer.”

“We are looking to invest with founders in business lanes that are reimagining their category. They are thinking about how the consumer or target market is changing, what the implications for business are for that, and if and where there’s an opportunity to introduce something new and better,” Green said.

She walked the audience through what it would look like to bring a start-up through the venture capital model. In the seed stage, founders need to demonstrate that they can “get an idea and turn it into action,” Green said. There should be some early indications that what the company is doing is resonating with consumers.”

For a Series A, “Your job is to build a little bit more infrastructure, but more importantly driving metrics toward traction,” Green said. That looks like getting more users, more click-to-cart, more checkouts, more products, repeat purchases or all of those things, depending on the business category.

“By the time you’re going out for a Series B, you have something,” Green said. “The investor can take comfort in the fact that the founder has been able to get a few critical team members in place has been able to deploy, let’s call it somewhere between $5 million and $10 million in an efficient day and has a real vision.”