If you have decided that finding investors for your fashion business is the best option for you, here is some advice on how to prepare yourself to find the right one; whether you’re looking for a venture capitalist, an angel investor, a super-angel or a growth investor.
Finding an investor is not for everyone, but if you have the financial backing that you need, you will be free to work on promoting your fashion business, design more products and sell, sell, sell.
You should have a plan
First things first: You need to make sure that you have a business in place. One that is attractive and stable enough for someone to plough their money into. Read our advice on a one-page business plan here.
One of the main components of a good business plan is the research you put into it. You should be aware of your target audience a.k.a. your “ideal customers,” your competition, the demand for your product, and where it would sit in the hopefully hungry market.
You need to make sure that your business sounds, and actually is, worthy of investment, aside from how stunning your designs and ideas are. After all, would you invest in a company that sounds like it was bound to fail? No, you would not, because you would not want to lose any of your money. No one would, so remember that.
Having a business plan is also great for your mind because it allows you to think about the trajectory of your business in a clear way. You will devise your business plan, so therefore by the time you’ve finished with it, you will know it inside and out.
Then you need to flavour it with terms that mean, “this will make you [the investors] money.” And just like an actor who has learned their lines, your delivery will be believable and enthralling.
Know who you want
Do your research and be on the lookout for investors that have already invested in fashion start-ups. It might be helpful to set up an AngelList profile to share your information with potential investors – you can also learn about them.
Investors need to understand your product, and if they haven’t got fashion businesses in their portfolio already, there’s a chance that they won’t understand you. And, there’s little chance that they’ll be able to advise you further or provide you with the service that you’d been hoping for. Furthermore, they won’t have other fashion businesses that they’ve worked with to introduce you to. Connections like that could be really valuable to you, so it’s best to find investors who can potentially help you with more than just funding.
Think before you speak
Try to speak to partners directly and don’t say yes (or no) to the first investor that you speak to. Treat your idea with pride and don’t settle for second best. Your fashion business is a big deal, so treat it that way. Don’t be afraid to take time to think about your decision and to fully digest what each investor says and offers you.
Also, don’t just say yes to the money. Think about the conditions that the investors have for your fashion business. You cannot agree to someone’s investment and ignore the small print, as there will be consequences, and they could be costly and damaging. For example, you must expect that you’ll trade shares of your company when you work with an equity investor.
Ask a friend
If you have a friend that you trust who has a strong business career behind them, ask them to look over your pitch before you see an investor. Double-checking figures and having a professional check on your work will only be beneficial for you. They may also have ideas on how to present data that will be particularly attractive for investor types.
Keep it short, keep it simple and sell yourself
Your pitch should be in the form of an electronic presentation and should include a minimum of 10 slides and a maximum of 15. Use this succinct and clean-cut method to also sell yourself and your business: whether that’s through the use of figures, or detailing your strengths as a professional and entrepreneur.
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