Investors either fell asleep or laughed in his face.
The pitch: An online clothing exchange for women and kids.
James had the idea as a college student frustrated with the mountain of slightly used clothes piling in his closet. After polling fellow classmates, James figured nearly 70% of the clothes in closets were going unworn.
The solution? An online marketplace for secondhand goods.
Shortly after graduating from business school, James hit the road looking to fund thredUP, touring up and down Boston’s Route 128 and Silicon Valley’s Sand Hill road.
He admitted to Business Insider that his early pitches came up short.
“Often the number one reason why companies are successful at raising money is they find their right investors. There are hundreds of great investors out there, I just needed to find the right one who believed in what I was doing.”
His persistence paid off. After getting some help from family and friends early on, James now has no problem raising money from VCs.
Most recently, thredUP announced an additional $175m in funding, bringing the total raised to just north of $300m — a far cry from the ‘no’s,’ James first encountered. James and his team plan to use the money to fuel their Resale-as-a-Service model with key partnerships and inventory growth.
Because the numbers tell all…
When it comes to the secondhand market, the numbers don’t lie. It’s booming.
“It’s a category that’s very much winner-take-all,” said Reinhart. “VCs know that if they pick the winner, it’ll have a long-term sustainable advantage.”
According to thredUP’s own 2019 Resale Report, secondhand clothing is expected to 2X in the next 10 years. And that’s coming off it’s most recent hot streak beating traditional retail growth by 21X in the last 3 years.
But it’s more than just numbers that have allowed thredUP to gain the attention (and financing) of large VCs since those first dozen rejections.
How did thredUP finally get traction?
According to James, the simplicity of the idea helped get investors on board early on.
We all have closets full of perfectly-good clothing we never wear. Turning that clothing into cold hard cash was the essence of James’ idea.
James remembers the breakthrough point in 2010, during a meeting at Trinity Ventures.
There, a partner told him the exact words he’d been rejected 27 times to hear, “I totally understand how thredUP works.“
Now, we’re not saying thredUP is a simple business. The logistical circus of storing and selling secondhand clothing is a mystery to us, but the simple pitch: “money for your unused clothing” is hard to pass up.
If you want more tactics like this, join us at Hustle Con December 2-3, 2019. It’s the Bay Area’s premier 2-day networking conference for founders by founders.
James will be there sharing details from his origin story and some of his early growth tactics, along with 29 other founders.