Jan 22, 2018 · 30m · 20vc
20VC: Why Brands Can Have The Same Revenue Multiples As Enterprise Companies & The Right Way To Think About Amazon In Today's World of Commerce with Eurie Kim, General Partner @ Forerunner Ventures
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, Harry Stebbings interviews Eurie Kim, General Partner at Forerunner Ventures, to explore early-stage consumer brand investing, portfolio construction, DNVB unit economics, and macro commerce trends like Amazon and M&A consolidation.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 32.7% of the talking time here. How this is scored →
Harry as informed peer 4.0 Guest teaching 3.6 Guest disagreement 2.6 Harry pushing back 2.0
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 5:22 Eurie rejects premise on enterprise vs consumer multiples
Eurie directly challenges the question's core premise, correcting the assumption that enterprise SaaS companies inherently secure higher revenue multiples than top consumer brands.
Hardest push from Harry ▶ 18:15 Harry presses Eurie on time required to establish a brandHarry explicitly pauses the conversation to push back on Eurie's timeline claims, asking directly if she disagrees with the widely accepted belief that brands take long periods to establish.
Biggest teaching moment ▶ 5:35 Eurie cites M&A data resetting Harry's perspectiveEurie corrects Harry with hard SaaS M&A average multiples (3.5-4x), prompting Harry to acknowledge that her data completely changed his mindset on the topic.
Harry holds his own ▶ 7:34 Harry frames VC fund math and ownership mechanicsHarry showcases strong domain knowledge by articulating how ownership dominance drives overall fund returns for early-stage venture firms.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Eurie Kim's Serendipitous Journey to Joining Forerunner Ventures | 2 | 1 | 1 | 0 | Harry asks a warm intro question about Eurie's path into venture capital. Eurie describes her serendipitous meeting with Kirsten Green over coffee. The dynamic is friendly and conversational with zero friction or deep technical interrogation. | |
| Re-evaluating Revenue Multiples and Valuations in E-Commerce | 4 | 7 | 6 | 2 | Harry relays a question from Michael Kim assuming consumer brands get lower revenue multiples than enterprise SaaS. Eurie explicitly pushes back on the premise, citing analysis showing average SaaS M&A multiples are 3.5-4x compared to 4-6x for consumer brands. Harry admits this statistic completely changed his mindset. | |
| Portfolio Strategy: Ownership Targets, Reserve Allocation, and Follow-Ons | 5 | 3 | 2 | 3 | Harry demonstrates good understanding of VC portfolio construction, asking about ownership requirements, reserve strategy, and signaling risks. Eurie explains Forerunner's shift from percentage ownership to 'dollars to work' and how follow-on decisions are handled transparently. | |
| Defining DNVBs and Unpacking Forerunner's Core Investment Criteria | 4 | 3 | 1 | 2 | Harry asks Eurie to define Digitally Native Vertically Integrated Brands (DNVBs) and probes into how Forerunner evaluates authentic brand building versus product sales. Eurie elaborates on customer relationship ownership and unit economic margins. | |
| Dynamics of Direct-to-Consumer Customer Acquisition and Rapid Scaling | 5 | 5 | 4 | 4 | Harry asks about customer acquisition challenges and questions the belief that brand building takes a long time. Eurie challenges his assumption by citing Away reaching $50M in 22 months and Allbirds hitting $1M in month one, showing rapid scaling is possible. | |
| E-Commerce Market Consolidation, Incumbent Dynamics, and Leveraging Amazon | 5 | 4 | 3 | 2 | Harry raises the topic of M&A consolidation and Amazon's dominance, citing Kirsten Green's view that Amazon expands the market. Eurie details a contrarian strategy of leveraging Amazon's audience rather than fearing it. | |
| Quickfire Round, Board Member Insights, and Recent Investments | 3 | 2 | 1 | 1 | Harry runs through a rapid quickfire round covering board dynamics, voice platform risks, and Forerunner's latest investment in Shop Shops. The tone is highly collaborative and brisk throughout. |
Statements from this episode (13)
Forerunner Ventures is sole firm invested in both Jet.com and Dollar Shave Club
“Fun fact, they're the only firm to have investments in both Jet.com and Dollar Shave Club, two of the biggest and highest profile e-commerce exits in recent years.”
Eurie Kim: Average Enterprise SaaS M&A Multiple Since 2015 Was 3.5x-4x
“We actually recently came across some analysis that showed that all the enterprise SaaS M&A deals done since 2015, the average revenue multiple of those deals was three and a half to four X.”
Eurie Kim: Consumer E-Commerce Acquisitions Fetch 4x to 7x Revenue Multiples
“Dollar Shave Club being acquired by Unilever for five X revenue and Shoei's acquisition of by PetSmart, which are four X and even more traditional commerce deals that you see, which are as high as six or seven X for some beauty deals that L'Oreal and Unilever …”
Eurie Kim: A $100M venture fund needs a 3x-5x return to be top-tier
“If you have a hundred million dollar fund, you still need to make three, four or five X on that to be a top tier firm.”
Eurie Kim: Forerunner Ventures targets around 20 deals per fund
“Hey, we're only doing 20 deals in each portfolio. Each of these deals needs to make a difference if there's an outcome.”
Eurie Kim: Forerunner allocates 60% to 65% of fund capital to reserves
“Yeah, so as a guideline, you know, we, we're similar to many of the other firms out there where we're earmarking reserves at about a two-to-one rate, so our initial investment is sort of 30% of our total dollars, and then 60% saved for reserves, or 35, 65.”
Eurie Kim: Early-stage brands cannot survive without high gross margins
“Certain categories have structurally higher margins than others. Beauty is obviously one of them. And by vertically integrating their earlier stage teams have the ability to start investing in their businesses and marketing and customer service. Because they h…”
Eurie Kim: Top DTC Brands Achieve Product-Market Fit Within Two Years
“They actually reach clear product market fit, certainly with their consumers in terms of consumer love within their first year or two of business, you know, and it's typically really hard for a brand to start breaking out several years after being in business.”
Eurie Kim: Away Will Reach $50 Million Revenue in 22 Months
“I think if you think established is getting to fifty million dollars of revenue, I would say Away is going to do it in 22 months.”
Eurie Kim: Allbirds Generated $1 Million in Its First Month
“Allbirds, which is not in our portfolio, but another really fast-growing brand, I think they did a million dollars in their first month of business.”
Eurie Kim: Amazon is likely surpassing Macy's in US apparel sales
“They're probably surpassing Macy's now for number of dollars sold for apparel in the U.S.”
Eurie Kim: Voice commerce commoditizes unbranded products, increasing DTC brand value
“Voice is a new platform and many products are going to run the risk of getting commoditized. So when you say, Alexa, I want toilet paper, does it care what brand of toilet paper you get? You know, probably not. It's probably a circumstance where you're just go…”