6. Intern QueenWhat It Does: Internship placement consultancy
Founder: Lauren Berger, 25
Web Site: www.internqueen.com
Based: Los Angeles
While earning her degree at the University of Central Florida, Lauren Berger says she completed 15 internships in four years. After graduating in 2006 she began helping the children of her parents' friends land internships. Soon, the idea to start a consulting business was born. But first Berger had to pay the bills, so she moved to Los Angeles and worked as an assistant at top talent agency Creative Artists Agency. While there, Berger met movie producer and director Marshall Herscovitz (Thirtysomething, The Last Samurai), who liked her concept and backed her financially for one year.
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Last September, Berger launched her company -- Herscovitz has a 12% stake -- offering to vet potential applicants and match them with more than 500 companies from across the country that pay to list on her Web site. Berger says what sets her service apart is the personal attention -- she and her small band of interns review every application and Berger calls each company to make an introduction. Potential interns can apply for one slot gratis to get a feel for the service. They pay $3 for every subsequent application; employers pay an annual fee of $50 for unlimited listings. In the four months the firm was running last year, Berger says she had about $100,000 in revenue and expects to double that to $200,000 next year. A regular on the college speaking circuit, she is also planning to expand into Canada and is exploring endorsement deals with Microsoft (MSFT) and Payless Shoes.
7. ModClothWhat It Does: Online marketplace for indie designer fashion and decor
Founders: Eric Koger, 25, and Susan Koger, 24
Web Site: www.modcloth.com
You might not expect an indie clothing e-tailer to get the attention of equity investors. But Eric and Susan Koger, the husband-and-wife team that launched ModCloth in 2002, near the end of their freshman year at Carnegie Mellon University, have managed to raise a little over $3 million from angels like StubHub co-founder Jeff Fluhr and venture capital firms First Round Capital and Maples Investments. ModCloth's inventory strategy helps explain its success. Eric says Susan and her buyers build rapport with independent designers, try to get payment terms of net 30, and normally sell 70% to 90% of the goods within the net-30 period. "We can turn our inventory faster than we have to pay for it. That's enabled us to scale as fast as we have." Being online only and located in Pittsburgh keeps operating costs low, too. ModCloth employs 104 people -- mostly young women who, Eric says, "come at it from a perspective that's truly aligned with the customer, because they are our customers" -- up from 22 people a year ago. The company became profitable in 2007 but wasn't in 2008, largely because it spent a lot of money to redesign its Web site -- which now gets more than 1.25 million unique visitors a month. Eric says ModCloth has around $1 million a month in sales and forecasts more than $15 million total in 2009.
8. NoteHallWhat It Does: Online marketplace for class notes
Founders: Sean Conway, 25 (right); Justin Miller, 21(far right); B.J. Stephan, 24 (left); Fadi Chalfoon, 23 (second from left)
Web Site: www.notehall.com
Based: Tucson, Ariz.
Launched in 2008, NoteHall is an online marketplace for college students who want to buy and sell class notes. Sean Conway, who has ADHD and finds it difficult to comprehend a lecture and take notes simultaneously, says the impetus to start the company came when he noticed fellow students shared his frustration. For initial funding, the founders used $70,000 they put together from Conway's inheritance and Miller's bar mitzvah money. To access documents, users purchase credits via the site's virtual currency system ($3 buys 100 credits; notes from one lecture cost 25 credits; a study guide costs 100 credits). When a student purchases credits and redeems them, NoteHall receives a commission that varies based on the product. According to Conway, 20 colleges and universities are participating now, including Drexel University and the University of Arizona, and an additional 30 will be by December. Last year, NoteHall had $40,000 in revenue, will be profitable this year, and expects to reach $900,000 in revenue in 2010.
9. Trunk ClubWhat It Does: Online clothes shopping service for men
Founder: Joanna Van Vleck, 26
Web Site: www.trunkclub.com
Based: Bend, Ore.When Joanna Van Vleck graduated from the University of Oregon in 2005 with degrees in psychology and business, she worked as a style consultant, taking men and women clothes shopping. No surprise here -- most men disliked shopping but enjoyed the new duds. So Van Vleck decided the shopping process should be turned on its head. Instead of accompanying men to the shops, she would take the shopping to them. In January 2008, she opened a location she describes as a "swanky man hang-out spot," where hesitant shoppers were sized up and regaled with advice and brand-name picks. Within a month of opening, an angel investor approached her and offered to commit $500,000 to expanding the concept to other locations. But after Bear Stearns failed that March, he changed his mind.
Convinced her idea had potential, Van Vleck searched for another source of funding. During a meeting via Webcam with a new would-be investor, Van Vleck decided to shift gears. Instead of opening physical locations, she would operate the business virtually, using Webcams to meet with clients, assess their needs, and then ship a box of clothing to them. Clients would only pay for items they liked. With zero retail experience, she launched the site in November 2008, buying marked brands wholesale from suppliers and selling them retail. Trunk Club now has six employees, 36 independent contractors who work as fashion consultants remotely, and around 2,000 members. Van Vleck says the company is close to breaking even and is on track for $2.3 million to $2.5 million in revenue in 2009. She expects to close her first venture capital round with a Bay Area firm within a month.
10. TumblrWhat It Does: Microblogging platform
Founder: David Karp, 23
Web Site: www.tumblr.com
Based: New York
In 2005, David Karp was running his software consulting business, developing new media for big media companies. He got the idea for Tumblr after becoming captivated by a new form of blogging known as "tumblelogging" that presented material of various formats (such as text, photo, and video) in a stream. While building a tumblelog for himself, the programmer realized other fans of the form would want to use a simple tool that would allow them to create their own. So during a two-week window between consulting jobs, Karp, who first started coding when he was 11, created the first iteration of such a tool designed with speed, ease of use, and customization in mind. Launched in 2007 for general consumption, the Tumblr platform now has 1.8 million users and has landed $5.5 million in venture capital from two rounds of funding with Union Square Ventures and Spark Capital. Karp, 23, says the 10-person company is not making money yet but will be experimenting with revenue-generating features this quarter. "Goal No. 1 is growth. We're aiming this thing for a mainstream audience."
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