Strategy: Invest in companies using technology to take advantage of dislocations in retail. Here’s how each finds the stand-outs in an increasingly crowded start-up field: Others include Forerunner Ventures, Thrive Capital, Stripes Group and Felix Capital. Imaginary Ventures is among the newest in a crop of VC firms specialising in digital lifestyle to spring up over the last decade. 'Now, the world thinks of them as product companies that start their journey online in direct to consumer.' 'Ten years ago, the average investor looked at these companies and thought of them as tech companies that were selling product,' said Nick Brown, partner at Imaginary Ventures, which launched in 2017 and closed a $75 million round in early 2018. That requires a different skill set for many investors, who must analyse fashion and beauty start-ups on both financially and creatively before pulling the trigger on a deal. The challenge for VC firms is to sort the brands with effective approaches to wooing millennials from the pretenders anyone can sponsor a running club, but there’s only one Outdoor Voices (total amount raised: $57 million). They also tend to have deeply loyal followings among young shoppers: so-called communities developed through careful branding, events and a strong social media game. By selling directly to consumers, they can make fatter profit margins than wholesale-dependent labels and generate reams of valuable customer data. Part of the appeal of these start-ups is that they’re growing at a time when many brick-and-mortar retailers are not. Venture-capital firms are snapping up stakes in digitally native fashion and beauty start-ups, pouring tens of millions of dollars into brands they hope will grow into the next Reformation or Glossier. Behind the scenes, at this and other trendy digital brands, investors are also queuing up for a piece of the action. NEW YORK, United States - When Everlane opened its first store in New York, customers lined up to snag some of the label's signature cashmere sweaters and basic T-shirts.

Stripes group