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How This Company Is Profiting Giving Perks to Military Members and First-Responders GovX's small customer base helped it cash in with investors.

By Michelle Goodman

This story appears in the March 2016 issue of Entrepreneur. Subscribe »

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The average citizen shops online at Amazon. But folks in the military and government first-responders (such as police and firefighters) have a deeply discounted online marketplace just for them: It's called GovX, and it carries nearly 100,000 products from about 500 brands, including Ray-Ban, Garmin, prAna, Woolrich and 5.11 Tactical, at discounts of 25 to 40 percent.

It's a good deal for shoppers, but how did GovX make this niche, low-price site sound like a good deal to investors? Last summer, it announced it closed a Series B round of preferred stock financing that brought its total investments to $11.5 million.

The answer: GovX knows how to make the most of its rarefied assets. San Francisco VC firm Rothenberg Ventures, which contributed to the Series A round, was attracted to the platform's proprietary verification technology -- the software GovX developed to make sure every shopper is actually in the military or government. It also loves the huge market potential: about $75 billion in annual e-commerce sales. "If you can be the de facto market leader in selling to a subset of the American population that's empowered and growing, that's big business," says Mike Rothenberg, founder and CEO.