Brian O’Malley (Forerunner Ventures) - How he’s investing in the empowerment economy, the evolution of consumer venture capital and raising $1 billion fund

Our guest today is Brian O’Malley, Partner at Forerunner. Forerunner is one of the top consumer venture capital firms that tirelessly champions founders who deliver the innovation they demand. Some of Brian’s investments include Sunday, Canal and Dumpling. Recently they raised $1 billion for Fund 6. We discuss how Forerunner’s thesis has evolved over the past few years, what is the empowerment economy, and current valuation and venture climate today.

We discuss:

1. How do you define investing in consumer today?
2. It seems as though Forerunner’s thesis has evolved from only investing in pure consumer companies to ecommerce enablement/B2B, along with other funds that primarily focus on consumer. Can you talk about why the transition?
   1. Is part of the reason why because it’s harder than before to pick brands that could generate great returns?
3. What is the empowerment economy?
4. In your article “Empowering Main Street”, you mention how OpenTable and Yelp achieved massive local market share, but they weren’t embraced. What do you mean by that and how do identify if a company you’re looking at is being embraced? Partnering up with their customers
5. Did COVID at all change your thesis when it came the your empowering economy thesis?
6. When you’re looking at empowering SMBs or bringing them online, when does a white label option make sense vs. a standalone application?
7. I certainly understand the push for consumers wanting to shop local, but isn’t partly what killed local stores that they couldn’t compete on price with the Walmarts / Targets? How do you think about consumer price sensitivity?
8. When you and your conduct your consumer insights research, how do you make sure there’s alignment with what people say and how they act?
9. Where customer
10. What are some of the differences between investing and evaluating a business where an SMB is the customer rather than the customer?
11. How do you also think about the current venture landscape when it comes to valuations?
12. There’s been a lot of chatter about some of the more high-profile companies folding and there’s been a debate about who is responsible - could the board have guided the CEO to cut burn for example. After you invest, what do you think about a board’s role and board construction?
13. What’s one thing you would change about VC?
14. What’s one book that has inspired you personally and one book that has inspired you professionally?
    1. The Wright Brothers book
    2. Shoedog by Phil Knight
15. What’s the best piece of advice that you’ve received?