Spend some time studying thredUP, the focus of the “You Be the VC 14.2” feature.

Is it more likely that thredUP will grow through internal or external growth strategies? Provide suggestions of internal growth strategies and external growth strategies that make sense for thredUP.

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YOU BE THE VC 14.2 Company: thredUP Web: www.thredup.com Twitter: thredUP Facebook: thredUP Business Idea: Provide a convenient online platform for the parents of growing children to exchange the clothes their children grow out of for clothes their children need. Pitch: The average kid grows out of a set of clothes every three to six months. In the United States, evidence suggests that by the age of 17, kids have outgrown over 1,300 items and parents have spent nearly $20,000 on their clothes. There are existing ways for parents to sell or exchange outgrown clothes, including swap parties, eBay, and consignment shops. But these are inconvenient solutions, and often yield very little money or results for the effort involved. The problem is particularly acute for the parents of babies and young children. As adorable as kids' clothes are there's no escaping the fact that healthy young children grow out of clothing quickly. If you're a parent with a baby or young child, or know someone who is, you're probably nodding your head in agreement. There's just not a good solution for selling or exchanging used clothing to acquire new clothing-until now. thredUP is a Web site that allows parents to exchange boxes of lightly worn clothes that no longer fit their kids for similar clothes from like-minded families. Here's how it works. Users can browse thredUP for boxes of 10 to 18 tops, bottoms, or a mix of both, and search by gender, size, and season. Once a selection is made, the user pays $5 plus shipping, and the box is on its way. The user is then obligated to assemble a similar quantity of clothing to put into a box and inform thredUP of what's in the box. thredUP will then list that box on its Web site. When someone chooses their box, the user will be sent a link to the USPS Web site, where they'll be provided access to a free shipping box, a printable mailing label, and schedule a pick up for the box. This process can be repeated over and over again, as a user's child grows and needs new clothing. Added benefits to the service are that it helps families save time and money and is environmen- tally friendly in that, currently, over 20 billion pounds of clothing and textiles enter U.S. landfills every year. By helping families share rather than prematurely discard used clothes, thredUP can help reduce that number. thredUP makes money in two ways: (1) the $5 transaction fee for each swap and (2) via premium memberships, which sell for $4.99 per month or $29.99 per year. A premium membership provides subscribers specific information about what's in the boxes they're considering. Q&A: Based on the material covered in this chapter, what questions would you ask the firm's founders before making your funding decision? What answers would satisfy you? Decision: If you had to make your decision on just the information provided in the pitch and on the company's Web site, would you fund this company? Why or why not?