Our Full Research on What the Data Says about Consumer vs. Enterprise

Early this year, we published **an article in The Information** about how performance of consumer startups stacks up to enterprise startups. This was based on an aggregation of over 12,000 tech companies that raised a series B since 2012, where 7,800 were then classified as enterprise or consumer and analyzed. In the analysis, we found that: - Consumer startups are as likely to go public as enterprise startups - Consumer startups are as likely to fetch >10x multiples at IPO as enterprise startups - Consumer startups are more likely to surpass the Rule or 40 than their enterprise counterparts

It may seem like a narrative violation, but consumer startups largely meet or surpass the benchmarks of enterprise, according to the data on startups that had raised series B rounds. It’s true that there are more public enterprise companies than consumer companies — but also, there are more enterprise startups that get early-stage funding.

After we published our piece, we received many follow-up requests for further discussion about the report. So today, **we’re outsourcing the larger body of underlying research we did to produce the analysis**, so people can flip through the data themselves and get a more granular view of how startups fare in the consumer and enterprise markets.As a part of this, it’s relevant to consider how Forerunner defines a consumer company. We believe there are two types of consumer businesses: 1. companies where the consumer pays for the product (”consumer-paid”) *or* 2. companies where revenue relies on consumer engagement, behaviors, or spend (”consumer-driven”). In this report, we compared both of these consumer categories to enterprise for a more specific view on how each performs — and to address those who might have wondered if the Shopify and Toasts of the world skew the numbers in favor of consumer (spoiler alert: they don’t).Overall, evaluating enterprise vs. consumer startups is a more nuanced effort than any one research report can show (even one based on analysis of 7,800 companies). But if we were to give a TL;DR on what we’ve learned with this effort, it’s that the consumer startups that muscle their way to a series B go on to perform just as well — if not better — than their enterprise counterparts.

Now, as AI ushers in a wave of new business models and consumer value propositions, we’re entering a cycle of change, growth and fundamentally new opportunities across all industries. Consumer is especially well-poised: consumer companies are known for their agility, adaptability and business model variation, and the top ones are almost always born out of a major technological shift. That means the next set of generation-defining consumer businesses are being built right now. (More on this to come in another post!).

Check out the **full report** and let us know what you think!