Apr 17, 2023, 3:00 AM ETInterview, Fireside Chat, Podcast

NastyGal Founder: I Was A Stripper! A Shoplifter! Then Built A $400m Business! Sophia Amoruso | E239

Sophia Amoruso was born in San Diego and raised in Sacramento, California, in a household marked by parental conflict and financial instability.
Her parents were commission-only workers in real estate and loans, eventually filing for Chapter 11 bankruptcy when she was a child.
She experienced a strained, isolated childhood as an only child, noting she felt responsible for mediating her parents' arguments.
Her father was highly critical, instilling a deep-seated drive for self-improvement alongside chronic self-doubt and anxiety.
She was diagnosed with ADD in childhood; however, she initially refused medication, believing her distraction was a response to her environment rather than a medical condition.
She has struggled with depression throughout her life, describing herself as "a little dark" and noting she rarely laughed without a specific reason.

Amoruso displayed early rebellious behavior, including refusing to follow classroom rules and skipping school.
At age 17, she moved out of her parents' home after they divorced; she was later homeschooled and received her diploma via mail.
She bounced between various unstable living situations, including living in a closet, working as a stripper (using a fake ID because she was under 21), and living with an alcoholic boyfriend.
She engaged in shoplifting to fund her lifestyle, targeting large retailers with "no chase" policies to resell items on Amazon.
Her first online business involved reselling stolen books on Amazon, where she would buy them for $10 cents less than competitors to ensure quick sales.
She was arrested for shoplifting at age 20 for items including a George Foreman grill, a basketball, and organic tampons; this incident coincided with a missed court date for a clinic visit regarding an unintended pregnancy.
She eventually secured a job as a campus safety host at the Academy of Art University in San Francisco specifically to obtain health insurance for a hernia repair.

In 2006, while working the safety job, she started an eBay store selling vintage clothing, naming it "Nasty Gal" after a Betty Davis album.
She observed eBay sellers making significant profits on vintage items and realized she could reverse-engineer their success by improving copywriting, photography, and styling.
The business was officially launched in 2008 as "Nasty Gal Vintage" after she paid off her mother's mortgage with initial earnings.
Revenue grew from $150,000 in the first year to $150,000 in a single day within a few years.
In 2012, the company secured $60 million in funding from Index Ventures at a $350 million valuation on a $28 million revenue run rate.
Amoruso had no formal financial training at the time of the fundraising and did not understand concepts like operating margins or P&L statements.
The influx of capital led to rapid, uncontrolled expansion, including hiring 100 employees in a single year without established processes or culture.
The company pivoted from vintage to non-vintage wholesale to scale, but this contributed to profitability issues.

The company collapsed after approximately 10 years due to overvaluation, misaligned expectations for a billion-dollar exit, and a lack of operational infrastructure.
Amoruso faced a simultaneous personal crisis: her husband left her, and the company filed for bankruptcy.
In 2016, she appeared on the cover of Forbes and published the book Girl Boss, cementing her status as an entrepreneurial icon.
Four months after leaving Nasty Gal, she learned the Netflix series Girl Boss was airing, which portrayed a caricature of her life and conflated her past success with the company's failure.
She described the fall as "sending her to the grave," noting that her naivety and lack of experience with scaling a large organization contributed to the collapse.
She revealed she was offered a $400 million acquisition deal but rejected it based on advice from her investor, who wanted to push for a higher valuation for his own investors.
Amoruso does not regret rejecting the offer but acknowledges partial regret that the investor's interests were not fully aligned with hers.
She notes that headlines blamed "millennials" for the failure, a narrative she disputes as she was one of few representatives of her generation in the spotlight.

Amoruso views her feeling of "not belonging" as a superpower that allows her to challenge conventions and do things differently.
She attended the Hoffman Process, a retreat designed to map childhood patterns to adult behaviors, where she identified a core lack of self-trust.
She attributes her inability to make quick decisions to a internalized critical voice inherited from her father, which she now tries to balance with a supportive internal voice.
She states she does not wish to remove her self-doubt, as it serves as a necessary accountability mechanism and prevents complacency.
She has been open about her history of depression, noting that she has never known a time without struggling, though she manages it with therapy and medication.

Amoruso is now an early-stage investor and founder, focusing on two main projects: Business Class (an entrepreneurship education program) and Trust Fund (a venture capital fund).
Business Class is intentionally designed to be a low-lift, high-profit product with no need for a large staff or CEO, allowing her to maintain control and avoid the pitfalls of scaling.
Trust Fund is a $10 million fund focused on zero-to-one startups, allowing her to stay "in the weeds" and mentor founders directly.
Her advice to founders is to bootstrap as long as possible to validate ideas before raising capital and to prioritize a reasonable valuation over a high one to avoid "overpricing" the company.
She emphasizes the importance of maintaining intuition over external advice, warning that relying solely on experts can strip a founder of the unique perspective that made them successful initially.
She defines "magical thinking" as the ability to envision and pursue paths that seem unqualified or impossible, a trait she credits for her success.
Her proudest moment remains paying off her mother's mortgage, while her current goal is to identify a long-term, meaningful life purpose beyond work.