Every fashion brand needs money to get off the ground, and attracting the right investor is one of the ways to do this. This week we are exploring ways to attract the right investors for fashion brands.
If you have a brand idea and a market strategy in place and are looking to raise funds from an investor, these steps below will guide you to the desired result.
Research Whom to Pitch In
“All venture capitalists want to take meetings, because that’s what their job is, to present ideas,” says Yael Aflalo of sustainable brand Reformation. “You have to isolate the ones that understand fashion. If they don’t have fashion stuff in their portfolio, it’s almost a waste of time to talk to them. They don’t understand your business, so they’re probably not going to get a deal done.”
Also one of the dangers of pitching to just anyone with money is that their values may not align with yours. It’s important to do the research and see that they’re interested in what you’re interested in. Sometimes because of need you may want to pitch to just anyone thinking that ‘any money’ is better than ‘no money’. However, any money can put the brand in a position tht is worse than having no money.
“Sometimes, any money puts the brand in a position that is worse than having no money. ”Mauvelli, 2021.
Remember that these investors may always have a say in your business, so it’s important that your visions properly align.
An example is this: you use affordability to gain a wider customer base and become more profitable but your potential investor’s belief is that high sales price is the means to profitability. When difficult situations arise and you are forced to choose between both ends, it may tamper with how you run your business. It may be difficult for you to push them out at that time so it’s best to research well before you take the money.
Deepen your research on your potential investor. Study them and their investment portfolio (or their own business), and their interests. If your potential investor is very interested in climate change and the use of eco-friendly materials. A winning point for you may be to emphasise how your brand does that (if it does that!)
Do this by being social. Networking still does work. Be at events where your potential investors would be if that’s possible for you. If not, reaching out through social media platforms works too. If you need practical help on how to do that at fashion events, click here.
Another smart technique to get talking to your potential investor is asking them for advice. “Cold calls or emails asking investors to consider your startup generally come off desperate,” says Hussein Ahmed of Transpose. “Instead, I prefer to seek out advice from investors that I admire. In my experience, asking for genuine advice can often lead to an engaged, passionate investor,” says Hussein.
Thoroughly know and accept the value of your brand and show it in how you respond to emails, calls and during physical meetings. A lot of top fashion designers advise that you play hard to get and act like there are other people lining up to get in partnership with your brand but it’s okay to stay true to yourself and not be pretentious.
Lay emphasis on your strengths, whether it is in your ability to hire great talents or your sales figures, or your growing customer-base. Also let them know that you’re passionate about your business, be confident enough to say your plans for your business.
Create a pitch deck
Don’t be frugal with the quality of your pitch deck. Get professional help if you need to. Someone who understands facts and figures to create a professional yet intriguing pitch deck for you
If you are wondering what a pitch deck is; A pitch deck is a brief presentation about your brand, your mission, your team, the problem your brand solves, the product you offer and the people you serve and how you reach them. It also includes the way your investor will benefit from your brand.
Take for example, you are Tiffany excelsis, and you produce bibs which help to protect babies in their sitting stage from a painful hit when they fall backwards. In writing a pitch deck for this, paint a picture around mothers being busy and how watching babies 24/7 would be impossible.
Tie the story around how safe a baby can be whilst using your protective bib and how this helps to boost the efficiency of the mum and ensure the safety of the child.
It is advisable to write your pitch decks as stories rather than facts and figures because your audience will be captivated by the story. Like the saying goes “facts tell, but stories sell
Your pitch deck should be 10-14 slides long. Your portfolio or handbook can be long.
Pitch about the Return on Investment
While investors may believe in your business, their investment is ultimately a means to an end. They need to make money on their investment. So, it’s important to highlight what they will personally gain from investing in your business.
In your pitch deck let your potential investors know what’s in it for them. Don’t just go on and on about your ideas and models. Doing that may sound like you’re trying harder to convince yourself, than convince them of the reason to invest.
“Whether you’re pitching an angel, VC, or your rich uncle, it’s imperative to show how you’re going to get them a return,” explains Nick Braun of PetInsuranceQuotes.com. “It’s tempting to focus on yourself and your business model, but ultimately, investors want to know what’s in it for them.The best way to stand out and get interest is to clearly illustrate how and when you will get them a return.”
Show results in your pitch deck. Get customers first and then find money. Especially for first-time fashion entrepreneurs. We know you need money to get a customer, but if you have one real customer who you’re sure has put money into your business in exchange for what you give, then that’s a great catch! Sell that to your Investors.
After you have done all, follow up diligently. Don’t be a pagan, 🙂 Believe in your brand. When you get the investment deal signed and packed, be happy, celebrate and follow through on all the promises you made to your investor.
However, if you do not get it, do not throw your idea away. Take advise on the areas pointed out during the meeting, rework an go again. You may want to give that same investor another try.
Extra tip: In sourcing for investors, be selective and look out for investors who offer not just money but other benefits.A few great benefits are more networks in the industry, mentoring and/or coaching. That way you’re staying connected to what your investor represents and it makes the partnership easier and more beneficial.