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Entrepreneurs: Eric Koger, 26; Susan Gregg Koger, 25
Funding: Approximately $3.5 million from First Round Capital and Floodgate Fund
ModCloth sells hip clothing for young women through a slickly designed Web site. Husband and wife team Eric Koger and Susan Gregg Koger met in high school and attended Carnegie Mellon University, at which time they started selling clothes on the Web, working out of Gregg Koger's parents' living room. During college, "the phone number for customer service was my cell phone and I'd have to leave the library while studying to take calls," she says. Today the Pittsburgh-based company has 108 employees and a 50,000-square-foot distribution center. Nearly 2 million unique visitors land at ModCloth.com each month.
Toughest decision: Continuing to invest in initially problematic e-commerce software they'd built using Ruby on Rails. Koger says the site is now easier to use and ModCloth is able to attract better technical talent by having stuck with the popular development language.