Each year, the editors of Inc. send copies of the Inc. 500 issue, our ranking of the fastest-growing private companies in the country, to prominent venture capitalists. This year, we asked three VCs to single out what they see as the best of the best. Here are five companies that stood out from the pack:
Modcloth
Pittsburgh
Revenue: $16 million
Employees: 100
Three-year growth: 17,191 percent
What it does: Sells women's clothing online
Why investors like it: The company's clever business model -- shoppers vote on which styles should be stocked. "They're getting people to think about clothing in a different way," says Paul Holland, a partner with Foundation Capital in Menlo Park, California. That creates an emotional connection with customers that will make it hard for copycats to move in.
Red flag: ModCloth is run by a husband-and-wife team, which, given American divorce rates, means there is an even chance of a messy leadership struggle.