The CQ: Reflecting on The Past Week+ at Forerunner
What SVB’s collapse has illuminated for us so far
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By Kirsten Green, Founder and Managing Partner
Hi everyone, Kirsten here with Forerunner. I know I speak for everyone at our firm (and potentially everyone in our portfolio) — when I say: it’s been a week. These past ~8 days have pushed founders and business leaders in previously unimaginable ways, with levels of uncertainty that felt like what is (let’s hope!) a once-in-a-career event.
This moment also revealed some of the most heartening resilience, inspiring camaraderie and selfless support that I’ve seen in our 10+ years operating Forerunner. I got into this business because I became somewhat obsessed with the pace of change and sheer passion and excitement that’s inherent to entrepreneurship, especially at the early stage. While under extremely unfortunate circumstances, this experience brought me back to that in a somewhat exaggerated and unexpected way — we saw some of the truest displays of what makes our industry so magnetic. Behind the headlines and tweets, business leaders and board members were heads down creatively coming up with plans, showing up for each other at every turn, making countless calls and introductions, and listening with profound empathy and an unwavering will to help. It was exhausting, intense, and at-times awful — but it was also weirdly inspiring and humbling. People often show their truest selves in a crisis, and we were immensely proud of how the Forerunner community showed up.
But unfortunately, these scrappy and dedicated entrepreneurs are not the face of this news cycle — despite them being the ones who stood to be the most impacted — and they’re not the face of how the tech industry is showing up more broadly. (And it’s absolutely worth noting that SVB’s failure extended far beyond tech, impacting a diverse set of industries and types of entrepreneurs). This discrepancy between what we saw behind the scenes and what played out more publicly feels like a real narrative problem, where some of the most polarizing and myopic voices are the loudest. It feels like we’re shooting ourselves in the foot — not only is it counterproductive to forging strong relationships with the public sector (which, if we’ve learned anything, is essential), I worry we’re discouraging the next class of diverse and empathic builders by obscuring what I see as our industry’s greatest strength: the community, strength, and hope-filled ambition that made tech so amazing in the first place. This problem may not be new, but this recent news cycle certainly felt like a microcosm of it.
I think a lot about tech’s public perception issues and the cultural tensions that underpin it (perhaps that’ll be expanded upon in another post), but I come back to the sense of pride and inspiration we get from our founders and their teams. We want to acknowledge their tremendous bravery and empathy in the wake of a crisis, and thank them for the role they play in shifting the narrative of tech for the better.
Here’s to feeling grateful, and to all the better nights of sleep ahead :)
What the team is talking about on Slack
The New York Times looks at how Silicon Valley Bank’s breakdown exposed the issues with the tech industry’s public image. One quote of note: “If there’s one thing I’ve learned over the last few days it’s tech is no political party’s ‘darling.’” And, “Some of the loudest voices of the investment community were screaming about the end times, positioning themselves as the victims of the bank’s failure, rather than the small businesses who couldn’t make payroll.”
Speaking of those small businesses…hundreds of smaller privately held California winemakers banked with SVB and are feeling the ripple effects of its demise. Already dealing with the fallout from losses from the pandemic, drought, and wildfires, these wine producers were left struggling to understand how they’d keep the lights on. According to the San Francisco Chronicle, Silicon Valley Bank extended more than $4 billion in loans to wineries and vineyards since 1994.
According to Fast Company, climate startups in particular need another SVB. One CEO said that the bank “understood the vision, and was patient,” given that climate technology often takes a lot of time and capital before it can see meaningful progress in creating viable solutions. Silicon Valley Bank was “heavily involved in specific parts of the climate tech ecosystem; the bank worked with around 60% of community solar projects in the U.S.”
And on the topic of climate, America’s path to renewable energy is hitting a major roadblock: a shortage of electricians. Incentives from the Inflation Reduction Act are driving increased demand. But with more electricians retiring every year than are being replaced, it’s going to be difficult to meet the government’s climate and electrification goals.
So is this recession ever happening? There are a few reasons why economists keep postponing the economic downturn for another six months. The TL;DR — the low unemployment rate, robust hiring, and strong consumer spending are thwarting the Federal Reserve’s plan to curb inflation.
Ever wonder why the high of career success can either feel weirdly fleeting or like a letdown? According to The Wall Street Journal, featuring Forerunner founder Andy Dunn: “we might get a hit of joy when we achieve something, but we eventually return to our baseline level of happiness (or unhappiness). Whatever heights we reach, we’re still, well, us.” TL;DR — we chase the upward momentum vs. the destination itself.
“Premiumization” is going to be everywhere, according to The New York Times. The latest trend has companies from American Express to Krispy Kreme and WD40 pushing premium offerings instead of discounts to appeal to higher-income consumers. And while this strategy may create new opportunities for revenue, it’s been likened to broadening gentrification leaving lower-income earners underserved.
The Economist analyzes young people’s perplexing spending habits and how their shopping is being influenced by the modern attention economy. “They are woke, broke and complicated.”
Which goes hand and hand with this Fast Company article stating that teen girls are craving more financial education. Over 80% said they would like more hands-on ways to learn about investing and personal finance. And they want to pay it forward too, with nearly 70% saying they would share their knowledge to help others. Another interesting tidbit: 66% of Gen Z and millennial women said they prefer to learn about money from other women.
Turns out the motherhood penalty isn’t the only reason for the wage gap between men and women. While they’re the fastest-growing segment of the labor market in the past decade, never-married women make 92.1% of what men who have never married make, according to Bloomberg.
Humane announces its $100M series C funding round to build devices and platforms for the AI era.
Fortune reports on how three female founders including Ariela Safira, CEO of Real, handled the turmoil following the collapse of Silicon Valley Bank.
Eclipse, Faire, and Balance are included in Y Combinator’s top companies of 2023.
Davis Smith, founder and CEO of Cotopaxi, is featured on Inc.'s What I Know podcast.
Mike Grillo, vice president of marketing at Ampla, is quoted in ModernRetail about how he has seen an increase in venture-backed consumer brands looking for secure places for their funds.
Attabotics makes Fast Company’s Most Innovative Companies list in the robotics category.
Alex Adelman, co-founder and CEO of Lolli, appeared on Chain Reaction, a TechCrunch podcast.
Bianca Gates, CEO and co-founder of Birdies, is profiled in The Zoe Report.
Jimmy Kimmel tells The Wall Street Journal the Oura ring is one of his must-haves.
Nécessaire wins the best body wash category in Cosmopolitan’s Clean Beauty Awards.
KiwiCo is mentioned in a New York Times story on food toys that reflect diverse cuisines.
After trying the Real app, a Bustle writer says, “my mental health has never been better.”
Glossier’s new C-suite hire and promotions are covered in WWD and Yahoo!Finance.
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