How to Build a $100M+ Cult Brand: Sophia Amoruso on Nasty Gal, Girlboss & Trust Fund

0:00The peak thing you can do as a brand is have someone who's your customer start a sentence with I am and put your brand name at the end. I created two things that became an identity for people. So people said, I'm a nasty gal. There were nasty gal tattoos, or they said, I'm a girl boss. And there's like girls with the word girl boss tattooed on the inside of their lips and arms. And I've seen this stuff. I mean, that is your superpower, branding, communications, all of that, like you're incredibly good at it. We have made it to founder mode era. So how does girl boss stack up to founder mode era?

0:34I very much built nasty gal in founder mode, but I don't necessarily believe in that in the same way. I think it's about getting things done. It's not about working around the clock. I bootstrapped Nasty Gal to$28 million in revenue. I didn't need investors. And I did it because like, okay, I had a$350 million valuation. I raised, the first money in was out of a growth fund. I owned 80 % of it and it was worth$350 million. The greater public doesn't understand, but the venture community understands that you build things and sometimes it doesn't work out, right? Nasty Gal reached over$100 million in revenue.

1:04And while it didn't work out in the end, And like, that's really significant. And I learned a lot.

1:19Sophia, welcome to Sorcery. Hello. Hello from London. Hello from London. Here we are. Thanks for having me here. I'm so excited. Dude, thanks for having me. I'm pretty sure that you're the host, so. Well, yes, but I'm here in London with you. Yeah, no, I'm really glad to see you here from across the world. We're here today to talk about you and your tech journey. You have almost a million followers across all your social channels. You had a Netflix series. You had a book. You founded Nasty Gal, Girlboss, and also Business Class. So I'd love to get into that and understand, okay, going into the next chapter of your life, you've founded Trust Fund.

2:00How did your early innings of building out brands and communications and strategies lead you to this venture fund? Yeah. I mean, the communications piece kind of came after the decision to start a fund. And, you know, I started a fund because I had raised venture capital. I raised$50 million back in 2012. You know, the company was valued very highly and ended up establishing really great relationships with people who have now become my LPs. And when I, you know, thought about branding, I don't know why I'm just I enjoy naming things. It is so fun. And I thought trust fund would be a very funny name.

2:40What's funny here now is that there is more of a cult, like a proper culture of kind of trust. Like people can laugh. I feel like people can laugh at it a little bit more in the States. And like kids with trust funds or whatever will wear the trust fund bucket hat because it's kind of ironic. And then people who don't have trust funds will wear a trust fund bucket hat. Because it's also funny. I think it's like kind of ironic for everybody. Yeah. And it just cuts through the noise. And so I think, you know, with Nasty Gal, it was very, it was a provocative name. You know, girls would email me or DM me and be like, oh my gosh, I typed in the wrong URL.

3:19I was trying to show my grandma something. And it is not what we anticipated. So it's, you know, even that is PR in a way. and the thing with you know nasty gal and then girl boss is that i created two things that became an identity for people so people said i'm a nasty gal there were nasty gal tattoos or they said i'm a girl boss and there's like girls with the word girl boss tattooed on the inside of their lips you know and arms and i've seen this stuff um so i think like the peak thing you can do as a brand is have someone who's your customer or reader you know girl boss ended up becoming a media company after it was a book and a Netflix series, start a sentence with I am and put your brand name at the end.

4:09And it's also very powerful. It's a responsibility. But it's something that you're able to extend a brand much further than the product because people have, you know, toward it that, you know, they're bought into in a way that they're not in with almost any other product. So when someone shopped at Nasty Gal, it was a vote for their confidence. It was like, I'm buying a motorcycle jacket. And when I put this on, it's a vote for my future, more confident self. And it was much more emotional than a piece of clothing. And that's what it represented to people. And with Trust Fund, you know, I think it was important for me not to have a gendered name.

4:57Third thing. And it's also, I think, really fun going to the Upfront Summit and having, you know, bro, you know, fund managers come up to me and be like, oh my God, best name ever. I wish I wish I had thought of that. Like there's something just like really rewarding about a guy being like, yeah yeah man I'm not sure why because it's like I've had praise from women my whole career yeah um for some reason maybe that's just like it's a higher bar just period as a woman to fucking do anything with trust fund I really wanted to make noise when I started the fund and create a sense of community and inclusion so I raised in public which is something called a 506c which means that I can solicit and fundraise publicly, which you typically can't do.

5:52So I was able to bring on LPs with checks as small as$2 ,500 and people who otherwise wouldn't have been invited to invest in a venture fund. So I have over 100 LPs. I don't know if I want to do that for fun too, but honestly, there have been zero squeaky wheels. Really? No one. not the bigger LPs, not the smaller LPs. I don't have institutional investors. It's like a just over$5 million fund. So the biggest checks are from people that I know and it's like, you know, two or 300 K and to them, that's almost like a donation. Um, so, you know, and I send my LP updates and, you know, everybody seems kind of satisfied with it.

6:39And I'm about three years in, just over three years in. So that feels pretty good. And I really wanted to make noise with it. I wanted founders to know about it. I wanted potential LPs to know about it. I wanted other folks in the venture community to hear about it. I wanted to, you know, get the best deal flow with trust funds. So, you know, I launched with a party at, you know, LA Tech Week. I had a bunch of people in Venice. Yeah, you were there. It was super fun. It was just like, hey, come have mezcal. That's what everybody wants. Yeah. But every other venture fund is like, let's get people on a really nice rooftop to stand up and hold drinks and stand 10 feet from one another and maybe talk to one another and probably have a name tag and not really drink.

7:29Not that I'm a huge proponent of drinking culture, but people just kind of want to have fun. And then, you know, they'll have like two stools and they'll like corral everybody and have like a mini panel which is also fine and I participated in those and there's a lot of value in that um but I was just like let's have fun and I think it was like I think in Business Insider said it was like one of the hottest parties LA Tech Week or something like that. It's true no it was really fun I went with Kobe Fuller at Upfront yeah I was at Upfront at the time and we both had a great time. Kobe's awesome.

8:01Yeah. Yeah. It was really fun and just kind of like a good way to, I guess, put a stake in the ground and be like, yeah, I'm here. I have a venture fund. It's real. Talk about it. Send me deals. And from there just kept building and, you know, had merch, you know, namely the bucket hats, which were really funny and fun. You know, the party had trust fund. I don't want to talk about napkins, but, you know, I brand everything. I love branding everything lots of details yeah and i've looked at some of your lps like it's in some of your press releases you have mark andreason you have paris hilton you have ev williams um could you just share more about these prominent names that you have in the mix and how you got them and it's like jason calicanis and david sachs and oh wow um chris dixon and andrew chen and rob hayes and like, you know, Josh Ellman and, you know, like Anthony Noto, CEO at SoFi.

9:01So it's, I was, it's like real heavy hitters. And, you know, I met these people so long ago. I think that's it. It's just, you know, I raised 50 million in 2012, right? Like 13 years ago. And that's when I met Marc Andreessen. You know, I met Ev Williams. It's just feel it's like been over a decade since, And, you know, I was at CES playing poker with Jason Kalkanis like a decade ago, you know. Anthony Noto I met at Kara Swisher in Jason's poker game after the Code Conference. And poker was kind of a – has been a big part of my, I think, relationship building over the last couple years more specifically.

9:43But, yeah, I just reached out. And some of these guys I hadn't talked to in a long time. but you know they've watched my story and you know I think generally the venture community the greater public doesn't understand but the venture community understands that you know you build things and sometimes it doesn't work out right nasty gal reached over a hundred million dollars in revenue and while it didn't work out in the end like that's really significant and I learned a lot and I have built a pretty amazing rolodex over that time that is a huge advantage And that was another reason why I started the fund because I was realizing I was just kind of sitting in that and I hadn't cultivated those relationships because I was going to do something with them or ask anybody for money.

10:28But that's how relationships work. You know, you create them over time and build trust and credibility and just like have fun with people. and you know then when you're like hey I'm doing this thing they often show up to support you and that's what happened. And you've gotten into some pretty great names because of those relationships and being a founder I think you started doing angel investing pretty early. Yeah I did started doing angel investing I think the first thing I did was first dibs in like 2013. I became an LP and like indexes fund in 2013 and iconic capitals fund in 2013 and those have done really well.

11:09Um, and I invested over in over 20 companies as a, as an angel, you know, I got into liquid death at 50 million posts and, um, you know, public.com at like a hundred. Um, I did kind body when it was like a$600 million valuation, but then, you know, once it hit, I don't know what, it was like a year later and I was like, okay, the IPO market shrunk up. This was supposed to be a shorter term investment. and it was a big check in a later stage company. So, you know, I have relationships with the founders at these companies. So I was able to be like, hey, can I, is there anyone who wants to buy my, you know, shares?

11:48Okay, you started selling secondary. So started selling secondary, sold some of Liquid Death. And I don't know if that's a good idea or not, but I was just like, okay, I'm just going to start divesting of some things. And that was around the time I had decided to start the fund as well. But angel investing was really fun. I was pretty sector agnostic. you know, stage agnostic and just really invested in things that I thought were great. Eight Sleep was another one of them. I think they've done really well. And then with the fund, I wanted to kind of niche down. And consumer isn't something that I really wanted to focus on, even though that's my background.

12:28I don't think that for the most part, consumer businesses are venture scalable. And I don't. You share more on that? I mean, I huge bubble of consumer and like there's still some that is drifting along. What's your perspective? Yeah. I mean, you know, I bootstrapped Nasty Gal to$28 million in revenue. I didn't need investors. And I did it because like, OK, I had a$350 million valuation. You know, I raised the first money in was out of a growth fund. So I owned 80 percent of it when it was worth$350 million. So it was kind of like a how could I possibly lose here? and you know I could have kept bootstrapping nasty gal right like I had offers to sell the company but they were not a multiple of 350 million dollars so you know I turned them down and then things could have you know wound up very differently for me then and so what I found was that you know with nasty gal you know the multiples uh once the company hit you know 100 million in revenue were like PE multiples.

13:32And I think that happens a lot with consumer businesses, not with all of them. But I, you know, I have friends right now with CPG companies and nobody will touch them. And they raised venture capital and their valuation is much higher than it, you know, is today because that was really hot for a while. And now like, and their existing investors won't put money in, which also happened to me where like no one wants to invest in you when your previous investors don't even want to pony up for pro rata. And I'm hearing about a lot of that too. So I think just the way things are going is just proof of that.

14:09But also I don't really want to try to help someone do something I wasn't able to do, which was build a billion dollar consumer business. But what I do understand are the end users of the products that I'm investing in and have a lot of empathy for the people that they're marketing to. I do understand the founder's experience. I'm not an engineer. But I also have an audience that is interested in starting businesses, you know, because I wrote a book about entrepreneur, you know, it's ship. And like, that's what I talk about. People don't really follow me for fashion. Like, and I do brand partnerships sometimes.

14:46And it's like Salesforce, Adobe, Canva, Dell. You know, it's like, it's all, you know software like b2b software that's coming to me saying like we've done the research you know your audience is primed for this product and those are the kind of products that i'm investing in too so that's another kind of i guess um validation point of my thesis and then the way i see the you know, companies that I invest in are on the outside as consumer businesses, even though their end user might be a freelancer or might be an SMB or a mid-market, you know, company or a much larger enterprise business. The way software companies need to present themselves today is as a consumer business because they're not, like, people aren't doing, like, outreach sales one-to-one in the same ways that they were and there's so much more competition yeah um these these aren't like legacy businesses with like you know a website that doesn't matter it's like salesforce's website needs to be you know something that's exciting and the copywriting has to be good and you know these tools that are ultimately b2b software tools are things that you know someone's going to make a decision about partially because of what they've heard about it what their website looks like what it says does it look cool are people talking about it and you know how clear the messaging is and that's all very consumer to me so you know I really help my founders who are very technical founders yeah solving yes technical problems to present themselves in a way that is not natural to them like the language they might use on their website is logistics and if it's for like a small shopify business you want to say something like shipping or maybe fulfillment but logistics is like way too sophisticated even for you know for a small business owner a shopify owner um and so i'm kind of able to be this enzyme that helps you know craft a narrative or language presentation or marketing for these b2b businesses that lands for someone who's trying to decide on a product similar to you know between squarespace and wix you're probably going to choose squarespace because you land on their website and it's like kind of better you know and that's a big decision and can make or break a business.

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18:07With same day and even same hour liquidity, access your funds anytime. Companies like Scale AI, DoorDash, Service Titan, HIMSS, Anthropic, Flexport, Robinhood, and Plaid trust and use Brex. Start today at brex.com slash sorcery. That's B-R-E-X dot com slash sorcery. No, this is like a real trend and it's something that I think few have understood or like grasp like how sophisticated marketing has come for lots of these tech companies because there's just so many of them. I recently had Eric Chrisman of Altimeter on and we were talking about Anderol. Anderol is a defense tech company. Like it is hardcore.

18:50Like it is like a big brand. But Jen on their team has been and their their whole team has been so good at crafting them in terms of like a consumer brand story. And that's something that Eric went further into. It's just like it's wild. Like there was they like launched one of their new products and Trump said something about it. Next thing you know, they have a billboard up about it. And they don't need to have a billboard, but they do because they're creating a vibe. And there's a lot of vibe building for all of these companies. That's becoming essential for customers. It's for investors, for everything.

19:27How do you think about how important that is for these companies and where should they start? What I found is that just getting your first customers is the most important. So you don't have to have the perfect website. You have to stand up a product and see what people think and if they're using it and how they're using it and talk to them. And beyond that, then it's like, okay, even if you're not putting out huge press releases, companies like Plot and Nectar, MyPortfolio and Agree.com, two of those companies just raised their seed rounds, are hosting events at Shop Talk where there are CMOs and CEOs who would be their customers.

20:10They're hosting dinners in New York. Agree's out there doing guerrilla marketing like they're at, I think, Saster. And all of the people in the parking lots are like standing in the sun, you know, directing vehicles, collecting. They just gave them all Agree.com hats, you know. And so like anybody who enters, you know, via the parking lot or is, you know, getting their ticket checked is seeing something for great, you know, it's like they're in front of the entire audience at this event, which is just really brilliant. And they're like, you know, they're a company that's going to replace DocuSign.

20:44DocuSign would never do anything like that. And so these are super early stage companies that are doing this stuff very early on. I actually have – this is another thing that I really love. So one of my portfolio companies, I just gave them carte blanche access to my LinkedIn DMs. And they will reach out to people that I am like tangentially connected to and say – as me. and be like, hey, I love what you're doing with such and such beauty company, such and such whatever potential customer of theirs. This portfolio company of mine is hosting a dinner at Shop Talk. It would be awesome for you to join and love to share more about them with you.

21:31Let me know if I can make an introduction. And then the founder will ping me and be like, hey, this person responded. Can you make an email introduction? So they're just like in there kind of going wild because people respond to me and I don't have to do it. And we've agreed on what their messaging is and whatever else. But yeah, it's just I think as a founder having been – this is like kind of off topic. But that's – you know, they're getting really credible people to attend these events because I'm doing outreach. Sorry for anybody who's gotten a DM. Well, that's like a value add most people have not heard of.

22:11that's really it's kind of like rogue yeah it's pretty rogue but it's creative there's a lot of trust you know yeah there's trust it's your portfolio companies and like it's it's part of this i don't know like there is uh there is a lot of competition for go-to-market strategies and like building these brands and so whether it's merch whether it's like a twitter account and instagram a good website, good logo, access to your DMs. These are like really defensible and like creative ways to like move around it. Yeah. And, you know, it's like, thank you. And I think that's why I started the fund because I was like, oh, I have this whole stack of like value add things, right?

22:52The platform, the individual relationships and ability to make intros and the credibility like in consumer, you know, of the would-be potential customers and then the understanding of the end user, ability to help craft language and brand. In today's high-speed business world, staying ahead means using the smartest tools possible, including the powerful capabilities of artificial intelligence. Meet Turing Intelligence. Turing builds customizable AI systems designed to solve your mission-critical challenges, no matter your industry. From expert guidance to tailored projects, Turing helps top companies realize AI that's more capable, more adaptable, and more effective.

23:31With Turing, discover how AI can accelerate your business growth. To learn more, visit Turing.com slash sorcery. Spelt S-O-U-R-C-E-R-Y. That's Turing.com slash sorcery. You know, two of my companies, I did cold outreach to TechCrunch editors. And I was like, hey, you know, on a Twitter DM. And I was like, there's a company fundraising. Let me know if you want to talk to them about a fundraise announcement. They don't even do a ton of fundraise announcements. Got responses and, you know, got like pieces in TechCrunch for these guys. I'm not a publicist. I don't even have relationships with these people.

24:04But like people respond to me. So it's also just fun, same as it is with a founder, to be like, what can I pull off? Right. And really fun to see like it actually work. Yeah, it's fun to push the boundaries and see what you can do. I mean, there are like certain instances not to talk about myself, but like where I really loved products and I'll like tweet about it. Next thing I know, this company made it an ad and it got a 4x ROI on all their ads and they sold out of their inventory like five times. Like insane. And you can just do these things. You can just try little creative things. Yeah, you are very credible, UGC.

24:43I don't know if many people know. with me. Yeah. Yeah. I think for the right eyeballs, it's just all about the right eyeballs. So in terms of your portfolio, what types of companies are you investing in? I know you mentioned software. You're leaning into that. You're looking at early stage. What's your target zone? So ultimately, I'm investing in anything I wish I had when I was building my business. I started Nasty Gal in the end of 2006. I had to have a CTO to have just a shopping website. And so there was no Gusto or JustWorks or integrations like project management software, creative tools.

25:28It was Photoshop. But everything kind of required you to be an expert to cobble it together. And now anybody can start a business. there's all the software that makes being a creative or collaboration or invoicing all of these things so much easier and I've just I've watched very enviously as a former founder these products emerge and having not had them I understand what the people what why a particular software or product might be needed and so that's the filter I look at my investments through because you can say that somebody needs something, but if they don't really need it, it might just sound like a good product.

26:10And I think investors who don't have operating experience or haven't been founders, I can't really imagine how they would evaluate that opportunity in the same way because I have it just kind of like it's in my DNA to understand that. And it ranges from agree.com is connecting contracts with payments. So as soon as somebody signs an agreement, they're taken through, you know, a flow where then they connect Stripe and they just pay right away. Instead of having to invoice them for, for example, a SaaS agreement, whatever it is, you know, the customer just pays right away. And that's like amazing.

26:51And then, you know, there's, you know, Nectar Social is basically creating a platform, it's far beyond this, but creating a platform where brands can market and sell and retarget through Instagram DMs the same way that, you know, Klaviyo did for SMS. Like, nobody's done that for DMs. And they just raised their, and it's not been announced. Maybe it'll be announced by the time this is live, but they've done an amazing job in a very short period of time. I'm actually a user of the product. Oh, really? Just for my Instagram account. Optizing your DMs? Yeah. I mean, it does a lot of other kind of AI capabilities within just comments and responding to people on social.

27:38What they've done is connect Shopify accounts. Somehow customers, well, the brand's Shopify account and can tie an Instagram user's account to their shopping history. so you can see someone's shopping history within their platform and you know use ai to target them retarget them like all kinds of things these there's two sisters in seattle who used to be facebook engineers working on the messaging product they know things that like nobody else knows and then baton market for example i think there's the products i wish i had and then there's products that allow people to become founders. And so, you know, Baton Market is an SMB marketplace where you can basically pass the baton and buy a small business.

28:29So they've got, you know, verified, you know, buyers and sellers, and they're using AI to broker these deals and due diligence and just create a new breed of entrepreneur who might want to roll up a bunch of dry cleaners, you know, and that's a very big thing. And then Toothio, for example, is a dental labor marketplace. But I understand the power of a labor marketplace or just a marketplace to change somebody's life. So I started Nasty Gal on eBay. I wouldn't become a founder if that framework didn't exist, where I just had to, there were inputs, and then, oh my gosh, I can work for myself. And there was almost nothing else on the internet that would allow somebody to do that.

29:15But Toothio allows dental hygienists to book shifts at dentist offices and work on their own hours, like for the first time. So it's like Uber for dental hygienists, right? That's very simple. But the power that that, you know, gives somebody who would typically have like a full-time job and very little flexibility is very, very, I guess, special to me. And I know how much it can change somebody's life. So anything that can help somebody become a founder, operate or scale a business, market, manage their finances. So it's broad, but it's also personal. And yeah, just feels like the natural range of things that both I'm attracted to and deal flow that I get.