Not too long ago, an investor group discussed how lifestyle companies are often tricky investments.

They reasoned that because these companies seem to operate in perpetuity—versus moving toward an eventual exit—their investment payout is largely uncertain.

I disagree.

Especially in the health & wellness sector, lifestyle platforms have found remarkable success. Two particularly relevant examples include Aaptiv’s recent $22 million Series C round and Well+Good’s $10 million acquisition by Leaf Group. Both companies are considered “lifestyle” brands, yet were compelling enough opportunities to warrant meaningful investment.

I’m fortunate to be advising a handful of high-growth lifestyle platforms in the health & wellness sector. Let’s take a look at why these models can be true stepping stones to successful, well-rounded companies.

Lifestyle Platform-to-Successful Company Is a Proven Model

There are several examples of lifestyle platforms that have evolved into full-fledged, rapidly growing businesses.

As I’ve written about in prior posts, Glossier set itself up quite nicely by building an audience before unveiling a single product of its own. The company had 1.5 million potential users by the time it launched its first product. Before that, it was a platform of information and reviews on other companies’ products.

Since its founding in 2010, Well+Good was an editorial leader in the fitness and wellness space. What proved compelling to buyers was the company’s ability to incorporate new and groundbreaking business extensions into the core site. Well+Good’s approximately 50 consumer events per year—including talks and retreats—helped the company establish a consistent record of robust revenue growth and profitability.

Two of the companies I’m advising these days are among the top health & wellness platforms that earn a meaningful portion of their revenues through themed events—and by collaborating with other brands. The traction that these offerings garner would never have been possible without the companies’ successful beginnings as well-known platforms with loyal followers.

Liquidity Comes in Different Forms

For many investors, the desired exit is either an outright sale of the company or an IPO—and these options are not outside the realm of possibility for lifestyle platforms.

At one point—before its recent $200 million minority investment from L Catterton—The Honest Co. was rumored to be exploring the IPO route. Meanwhile, Well+Good was fully acquired by Leaf Group, which intended to pair the asset with its Livestrong platform.

With these companies, however, there is more to liquidity than an IPO or sale.

Some of the strongest founders I’ve worked with are those who take care of their investors—particularly those who believed in them before anyone else did. In fact, a company I’m advising rewarded the investors in its latest funding round with 25% of the round, in the form of a secondary raise to provide near-term liquidity.

Other lifestyle companies have provided monetization by either buying back early shares at a premium, or offering to pay (rather than accrue) a dividend on preferred shares.

Trust Grows a Market

In its early pitches, Uber struggled to tout a huge addressable market. The ride-sharing industry was relatively small at the time, and the taxi industry did not promise much of a trajectory.

Additionally, Airbnb was initially at a loss to describe the size of its own market. The idea of letting strangers stay in your home sounded absurd to most people, in large part because the market didn’t exist yet.

But these companies drove the growth for their markets. They managed this by quickly gaining consumer trust and becoming top partners in their respective industries.

While global wellness is a $3.7 trillion market, the dollars aren’t necessarily free-flowing. Instead, consumers gravitate toward the platforms they trust.

Many of the wellness entrepreneurs I work with are renowned experts in their field. It’s no coincidence that they have legions of social media followers. The appeal of The Honest Co. might not have become quite as extensive without Jessica Alba—nor Goop without Gwyneth Paltrow, Draper James without Reese Witherspoon, or KORA without Miranda Kerr.

In short, consumers gravitate to these businesses because they started as trustworthy platforms that sought to inform the public way before the brands launched products of their own.

Creating & Enjoying Two-Sided Demand

Lifestyle companies create success via network effects by generating demand among not only their end consumers, but also the brands that are looking to partner with them.

Consumers flock to platforms that offer the widest breadth of top brands—especially in industries driven by trust. On the flip side, brands that are eager for exposure and consumer trust seek out platforms that offer the deepest base of focused, ready-to-spend customers.

Well+Good, for instance, is known for its creative direct offerings with brands like Nike, American Express, and Tiffany & Co. This was too good an opportunity for Leaf Group to pass up.

Similarly, the health & wellness platforms I advise are inundated with growth opportunities—including opportunities to collaborate with other brands through content, events, and products.

By starting out as lifestyle companies, these businesses established themselves as unbiased information hubs in their ecosystems. Eventually, when they started selling products from other companies—or even their own private labels—they began to enjoy self-perpetuating demand.

While lifestyle companies’ path to exit is not as concrete as the next enterprise SaaS startup, there are clear parallels and opportunities that warrant investment. Favorable unit economics, recurring revenues, and extensible platforms are common features among these companies.

In turn, the promising foundations lifestyle companies have built—loyal followings, network effects, and central hubs of information—set them up well for future success. Health & wellness platform companies will always find ways to become p