The unique thing about NG was that between 2010-2011 they had explosive growth and high profit margins selling the cheap clothes they were buying from commodity

The unique thing about NG was that between 2010-2011 they had explosive growth and high profit margins selling the cheap clothes they were buying from commodity asian vendors. The real secret sauce to NG's success was that the first couple of employees were expert buyers and knew how to spot profitable trends. Keep in mind Amoruso only knew how to buy and sell vintage. It was only after Amorus hired her first employees that NG began to resale higher margin new clothing. When Index Ventures came along NG was profitable and their growth was impressive, therefore NG negotiated very favorable terms since they were well in the black. That said, Index was the only VC firm willing to make that investment. No other firms participated. Later on, all other venture capital NG received was in the form of very high interest, high risk loans. The problem was that when Amoruso got the money, she mismanaged that power and made horrible investments (she also pocked a lot of the investment from Index, buying a $5MM home, Porsches, and other luxury goods). She tried to shift away from what had made NG money in the first place, to high-risk vanity projects.