Launching a Clothing Brand: How to Fundraise for Your Fashion Startup
Launching a successful fashion startup requires more than just an eye for design. Turning this dream into a reality can be expensive, and you will need to secure funding to get the ball rolling. In this post, we will guide you on exactly how to catch the right attention for fundraising: when and how to get started, the types of fundraising to go for, and where to look for funding opportunities.
Do I need to fundraise?
If you are like most of us, you may not have a nest egg to get your new fashion brand off the ground yet. Launching your new clothing company takes upfront commitment and costly overhead, even before making the first sale. Luckily, today there are so many accessible options to launch, or fundraise, for your new fashion startup.
When do I know if I’m ready to start fundraising?
We get it, this is a terrifying idea! It is easy to feel intimidated when thinking about startup fundraising. The good news? You are probably closer to being ready than you think. While you don’t need a website or a finished product, you do need two important resources before locking down that funding: a business plan and a pitch deck.
Write a Business Plan
A business plan is meant to persuade a banker or investor that your fashion startup idea is completely solid. This document speaks the language of business: factual and persuasive. It is very difficult to even be considered for fundraising until your business plan is completed, so this step is a must.
To write your business plan from start to finish, check out our How to Create your First Clothing Line Business Plan guide.
Prepare a Pitch Deck
How would you summarize your brand in a few minutes? What is your plan if asked to present your business in a meeting? Investors expect you to have a concise and compelling presentation at the ready. This is where a pitch deck comes in.
A pitch deck is your opportunity to sell yourself in a presentation. Think Shark Tank presentations, with less TV theatrics. A great pitch deck is only a couple minutes long, and usually has a slideshow or PDF booklet that goes with it. A powerful pitch deck is the best way to stand out and have investors remember you.
To bring your pitch deck to life, check out some Winning Examples of Fashion Pitch Decks here.
Your Fashion Startup Fundraising Options
Now that you are ready to hit the ground running, it’s important to define what type of fundraising is best for your fashion startup. Here are five popular fundraising options for your new brand – remember, each option comes with its own pros and cons.
One: Angel Investors or Venture Capital
Angel investors and Venture Capital (VC) companies are those who regularly invest in startup companies. A VC investment often means large pools of funding, helpful expertise, and connections with large companies. An Angel Investor can be on the individual level and usually gives you more creative direction (read our Angel Investor FAQ for details!). A fashion incubator or fashion accelerator may also be an option.
Two: Business Loans & Credit
Opening a line of credit in your business’ name can help you access a higher level of capital than what you would get for a personal account. Instead of paying it back in future sales, you will repay the investment with interest and debt payments.
Three: Friends and Family
You’re probably a creative person for starting your own fashion brand, so use that creativity in fundraising! Ask your network of friends, family, or business connections.
Maybe you can try Kickstarter or your own way to get in front of a new investing source.
Four: Your Pocket
When short on other options, it’s possible to fundraise for your fashion startup through your savings, side hustle or a personal loan. Not all businesses got their start from fancy investment bankers – it’s completely possible to make this happen all by yourself. Get creative in finding new ways to invest in yourself.
Think of all the time it takes to traditionally find an investor. What if instead you could dedicate all that time and treasure to getting more sales, and use that income to grow your fashion startup? This is bootstrapping, which means getting a head start on sales to build your cash flow. Put your business model to the test directly, and use your energy to get your business on its feet. Plus, the earlier you get started on sales, the more likely you are to earn more trust in investors or lenders down the road.
To incentivize new business growth, there are business grants out there to help you bring your fashion startup to fruition. Depending on your situation, you may qualify for a business grant. Do your research for the grants available to you and see what doors it can open.
So, what’s the right fundraising method? It all comes down to you, and what fits your story. Do your research to weigh the upsides and downsides for each and choose your path forward.
How to Find Startup Fundraising Offers
Great! You know what you want and what startup fundraising you are searching for. Here are tried and true ways to go out there and find them!
- Web Research: Don’t forget about good ol’ Google! Use the Internet to find all kinds of fundraising opportunities. One of my favorite resources is the Small Business Association website to search for available loans and grants.
- Social Media: Brush up your LinkedIn and use their search filters to find connections! When your marketing plan is complete, it would not hurt to drum up your brand’s social media presence to gain traction. You never know
- Networking Events: Online or in person, attend networking events geared towards matching entrepreneurs with investors.
A mix of the right preparation and the right strategy is the launchpad for successful fundraising growth. You don’t need to have a large savings fund or a successful track record in order to launch your fashion startup. As long as you have a strong business plan, pitch deck, and focus on the right things, you can overcome the financial restrictions blocking your way and start your clothing brand. We believe in you and can’t wait to watch your new business grow.
Need help with your fashion brand’s pitch deck or funding strategy? Find more resources and support at FoundersGoHere.com.