Fashion startups and venture capital don’t always see eye-to-eye, or wallet-to-wallet. Our new series, Ask a VC, seeks to get inside the minds of the partners who are doling out investment dollars in an attempt to find out what fashion and retail companies catch their attention.

Think of some of the hottest millennial brands on the market today, and there’s a good chance they got their start with a boost from Forerunner Ventures. The early stage venture capital firm boasts a portfolio that includes Glossier, Away, Outdoor Voices and Warby Parker — all innovative, digitally-driven brands that are modernizing the retail landscape.

San Francisco-based Forerunner partner Eurie Kim is quick to point out that, while fashionable, none of them are strictly fashion (or beauty) brands. They all telegraph a very specific lifestyle — a crucial detail, she says, for any company seeking venture capital funding.  Kim knows this well, having spent 15 years evaluating companies and helping them grow, first at Castanea Partners and then at Bain and Company, before joining Forerunner in 2012.

For the second installment of our Ask a VC series, in which we ask investors where their dollars are going in the fashion industry, we asked Kim why that lifestyle component is so important.

What makes a fashion company worthy of your investment in 2017?
We’re focused on investing in companies that have a real presence and a real brand. With venture investments, there’s a specific financial trajectory that a company needs to be able to follow, which is: really accelerated growth, great margins, and the ability to attract and retain customers over time. We look at: what is the brand that a team is trying to build? Is it authentic? Is it fresh in the market? Is it talking to a specific consumer where there’s white space?

We’re also always looking for what is special about the brand that’s going to make it rise above the noise. Glossier had such a fresh perspective — it was a brand that was for the community, from the community… always tapping into the needs and desires of the customers that Emily Weiss already had through her blog. It was the first time that anyone had really done that.

Is there anything in particular that you might look at with a fashion brand that you wouldn’t with another type of company?
When we think about a fashion company, we’re a lot more focused on margin structure, what the hero product is that will get the first few customers really excited, and whether or not the brand has the ability to expand across a broader lifestyle, because you can’t just have a billion dollar business with one product. Look at Bonobos — they started with pants, now they have shirts, suits, golf attire, etc. If a company feels that it’s too narrow in terms of the categories they can focus on, it probably doesn’t suit the venture capital growth trajectory.

Common mistakes?
One of the mistakes people make coming into this is that they think “I have this really successful fashion company and everybody loves it and it has a cult following” — which is great and we love that and want to be consumers of that brand — but is it going to be a billion dollar business in five years? Probably not.

In terms of emerging industry trends, what are you most excited about?
We’re excited about the beauty category because there’s been such an evolution of the customer and what beauty really means for them. We’re curious about what the Gen Z customer is looking at — a lot of them are really into hair dye, actually, so we’re looking into different hair products. In hair, especially, we haven’t seen anything really fresh come out. A lot of the salon brands have gotten really big and acquired, so there’s opportunity there for a different message.

What are you avoiding?
We’ve candidly stayed a bit away from women’s fashion because one question we have is: are we still in a world and time where everybody decides they’re all going to wear J.Crew, or Banana Republic? Today, people are wanting to be more individualistic and mix and match a little more, so, the era of having a gigantic brand that everybody has ten pieces from in their closet may not be the way the customer shops anymore.

What are some mistakes an entrepreneur can make when pitching you?
Don’t go into a firm and [saying something like], “We’re the Casper of XYZ space” or “We’re the Warby Parker of this space.” Founders who really understand why venture would be the right path for them tend to have a pitch or a story that makes more sense. What’s hard is when a founder comes in with a fabulous idea, but it’s definitely a 3-store concept that they should probably just get a bank loan for.

What lessons have you learned from failures?
One thing we see is that more successful businesses have a lot of discipline, and in the early days, they have core products and a core message that they really focus on. The biggest lesson learned is that if it’s taking you a long time to get the traction going, it’s very rare that you’ll suddenly spike. I would recommend people focus on what they’re really good at.

Do you invest based on your own tastes?
We consult a broad spectrum of customer types, and we certainly are not the arbiter of taste. We will spend a lot of time trying to understand what customer type a brand is trying to target. Then we’ll gather all of the profiles of that core customer and do a customer survey, focus groups and extra market research on understanding that demo. The benefit has been that much of the shopping arena happens to be for women. We’ve got a lot of women of different age groups covered, and a broad cross-section of networks that we tap into. Take, for example, Draper James. Nobody in this office wears Southern, hostess-y type dresses, but at the same time, we can look at [the brand’s products] and be like, “We totally know who this person is.”