With Amazon as the 800-pound gorilla, many of my fellow investors choose to ignore e-commerce altogether. In fact, the industry hit recent lows in a number of deals and investments. But as Bonobos’ $310 million acquisition by Walmart and Stitch Fix’s IPO demonstrate, there are still plenty of exciting opportunities in this space for investors.
In my ongoing hunt for investment opportunities, I recently came across a brand that had garnered significant traction without raising a lot of capital. This traction, however, was across traditional retail channels, not the channel that mattered most to me as a venture investor — e-commerce.
Why do I value this direct to consumer channel so highly? For one, e-commerce margins are better (in the 80 percent range versus as low as 50 percent in traditional retail). But it also offers the potential for scale that retail simply can’t match. My grandfather grew his textiles business methodically, one merchant and store at a time —…