How Bloggers Are Scoring Million-Dollar Funding Rounds

Digital Superstars Leverage Their Influence to Launch Product-Driven Startups

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Blogger and YouTube sensation Michelle Phan has managed to expand her footprint while lending her influence to a startup.
Blogger and YouTube sensation Michelle Phan has managed to expand her footprint while lending her influence to a startup.

Bloggers-turned-startup founders have been commonplace in tech, but the "big ideas" of fashion scribes never drew the same kind of investor appeal. Now, an influx of style-driven startups -- Moda Operandi, Rent the Runway, and more recently, Bauble Bar and Halsbrook -- is changing that.

Geri Hirsch never considered bigger opportunities when she launched the fashion-lifestyle blog Because I'm Addicted in 2005. "From day one it was always a hobby," said Ms. Hirsch, who reports that the blog draws more than 200,000 unique users each month. Even though Because I'm Addicted is now a source of revenue -- she sells ads through celebrity fashion site Who What Wear's blogger network -- it's never been her job.

But when Ms. Hirsch wanted to work fulltime on Leaf -- a series of DIY, style and cooking videos created with Erin Falconer -- she used her influence as a blogger to appeal to investors. "I want Leaf to be a lifestyle brand," she said. She envisions everything from shoppable videos to product lines.

Videos produced for Barneys New York last year caught the attention of YouTube-funded video channel StyleHaul, which commissioned Leaf to create another series. To get it seen, Ms. Hirsch leveraged her own social reach. The project was so successful -- one video, "How to Tie a Turban 3 Ways" garnered more than 250,000 page views -- that in July StyleHaul became Leaf's lead investor.

Since forming the partnership with StyleHaul, Leaf has done branded video content for retailers including Gap and Ann Taylor. More recently, it was commissioned by Redbook to create a project for the April 2013 issue. Starting in June, Leaf will have a monthly column in hipster West Coast magazine Foam, which will be accompanied by a video series.

Fashion and lifestyle bloggers have typically emerged as venture-backed brands capitalizing on the success of their personal blogs rather than creating separate ventures. (Design Sponge, the Pioneer Woman and the Man Repeller are all great examples of bloggers making money from simply being themselves.) One notable blogger who managed to expand her footprint while lending her influence to a startup is YouTube sensation Michelle Phan.

In December 2011, the digital star launched MyGlam, a monthly beauty- subscription bag in the vein of Birchbox. In September 2012, the company changed its name to Ipsy and announced a $3.8 million round of funding, led by Crosscut Ventures and Amalfi Capital. Along with selling the "Glam Bag," the goal is to build a community around beauty tutorials and info. Ipsy has more than 1 million registered members, over 150,000 Glam Bag subscribers and more than $1.5 million a month in sales.

"Working directly with Michelle -- that is your marketing plan," said Ipsy co-founder and CEO Marcelo Camberos. "It was really helpful as a proof point with investors."

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