Manish Chandra, the co-founder and CEO of Poshmark, once faced the terrifying prospect of serving jail time.

His company, which  raised $25 million in VC funding earlier this week, is a social commerce platform where users can buy and resell new or lightly used clothing items. Poshmark processes "hundreds of millions of dollars" worth of transactions annually, according to Chandra, and is on track to grow by a factor of three in 2016.

That's a far cry from the early days, when Chandra handled customer service calls, hosted trunk shows to generate local buzz, and facilitated payments through email and PayPal. (Today, Poshmark has its own proprietary payments system--a decked-out version of Braintree, the payments processor that counts Silicon Valley players Uber and Airbnb as customers.)

Shipping has long been the most expensive headache, Chandra says. It's also something that nearly led him to criminal consequences.

"At one point, the USPS was ready to put me in jail because we were hacking the partnership," he says."We wanted everything to ship fast, but we wanted flexibility in sizing."

So Chandra prepaid for thousands of two-pound shipping labels, and sent them to sellers so they could ship to buyers through Poshmark. He assumed that the weight and price would eventually even out, not realizing that the USPS is able to detect overweight packages (but not underweight ones).

"They came to us," says Chandra, "and asked for a very large bill," demanding millions in owed shipping costs.

In the immediate aftermath, Chandra did some digging. He discovered that Poshmark was in fact one of the largest and most active accounts for the USPS in Northern California. As a result, he pitched a strategic partnership that was similar to what eBay and Amazon had created with the mail carrier in years previous.

Chandra was successful in his pitch. The new label, called PoshPost, costs a standard rate of $5.95 per five pounds of clothing. It guarantees delivery within two to three days. (The label, it's worth noting, is now nearly $1 more expensive than it was when the deal was placed back in 2014.)

PoshPost is one of several developments for the company in recent years. Others include a virtual storefront (called the "boutique") for fashion entrepreneurs, and retail partnerships with 50 emerging brands. One of those is Half United, a jewelry brand that donates seven meals to families in need for every purchase.

Avid users can generate up to $100,000 annually through the social commerce site. "Power sellers," which Chandra designates as those collecting anywhere from 10 to 20 transactions each day, make up about 10 percent of total users. They're granted the option to purchase wholesale from brands, and then retail those items through their own Poshmark shops.

The San Mateo, California-based startup has raised $70 million to date--and, according to analysts, will be feeling the pressure to get to profitability this year.

"Our core business is very close to being profitable, but overall we are not," says Chandra.