When Rent the Runway co-founders Jennifer Fleiss and Jennifer Hyman bought their first time period sheet, it had an exploding clause in it: If they didn’t signal the provide in 24 hours, they’d lose the deal.
The co-founders, then college students at Harvard Business School, had been able to commit, however their lawyer suggested them to pause and attend the conferences they’d beforehand arrange with different traders.
Twelve years later, Rent the Runway has raised $380 million in enterprise capital fairness funding from high traders like Alibaba’s Jack Ma, Temasek, Fidelity, Highland Capital Partners and T. Rowe Capital. Fleiss gave up an operational position within the firm to a board seat in 2017, as the corporate reportedly was eyeing an IPO.
But the shoe didn’t all the time match: Earlier this 12 months, Rent the Runway struggled with provide chain points that left clients disgruntled. Then, the pandemic threatened the market of luxurious put on extra broadly: Who wants a ball robe whereas Zooming from house? In early March, the enterprise went by way of a restructuring, furloughing and shedding practically half of its workforce, together with each retail worker at its bodily places.
In 2009, Fleiss and Hyman had been profitable Harvard Business School college students. Hyman’s school roommate knew a outstanding lawyer who agreed to advise them on a contingency foundation in alternate for connecting them with potential traders.
Still, fundraising “was extraordinarily laborious,” Hyman stated. “We had been in the midst of a recession and we had been two younger girls at enterprise college who had by no means actually performed something earlier than.”
Fleiss stated enterprise capital corporations usually despatched junior associates, receptionists and assistants to take the assembly as an alternative of dispatching a full-time companion. “It was clear they weren’t taking us very severely,” Fleiss stated, recounting that on one event, a male investor referred to as his spouse and daughter on speaker to vet their ideas.
In an try to check their thesis that ladies would pay to hire (and return) luxurious clothes, Fleiss and Hyman began doing trunk pop-up exhibits with 100 clothes. On one event, they rented out a Harvard undergraduate dorm room frequent corridor and invited sororities, pupil exercise organizations and a handful of traders.
Only one individual confirmed up, stated Fleiss: A man “who was 30 years older than anybody else within the room.”