How To Get Investors For Your Clothing Fashion Brand

Once you’ve chosen to start your own clothing brand, it’s time to start thinking of the bigger picture—your funding. How do you get enough capital to start your brand? How can you bring in investors to help you start?

To Get Investors For Your Fashion Clothing Brand:

Create your comprehensive budget.
Talk to your friends and family first.
Network with people in your business.
Consider crowdfunding platforms.
Investigate possible angel investors or venture capitalists.
No matter what you do, provide value.

Whether you’re looking for your own storefront or just to start your own online venture, it doesn’t matter—you need investors. But what should go into your budget, and where can you find someone to possibly invest? What are the different types of investors? Read on to find out more.

Table of Contents

Create your comprehensive budget

The first thing that investors are going to look for is a budget. Do you know what you need? Can you anticipate any other possible funding avenues? Have you exhausted your other options? These are the types of questions your potential investors may ask. Make sure to have not just a prepared business plan but a budget where you can show your potential investors where you’re going to spend their money.

What are you going to need to include in your budget? Your budget should include:

Funding for manufacturing your inventory. You can’t sell something you don’t have, and without something to show for your business, it makes it that much harder to gain investors. This cost can vary depending on how you’re manufacturing, what items you’re creating, what fabrics you use, where you’re getting it done, etc. While this cost varies dramatically depending on the decisions you make, investing about $4,000 is a great cost in which to start.
A point-of-sale system. You have your inventory, now you need a way to sell it. If you’re selling online, this can be something as simple as an app that plugs into your website. If you’re in a physical shop, this would be your cash register system. You can usually fund one of these for about $500 initially, followed by a monthly fee.
Insurance and other business permit costs. Consult with a lawyer if it makes things easier, but there are certain permits you will be required to get, whether it be for your online business or your physical storefront. These can cost about $1,500.
Advertising. Whether you’re advertising for your clothing brand or your clothing line, it doesn’t matter—without brand awareness, your customers will never become your customers. Make sure you include in your budget enough money to start your own website (where you can integrate your point-of-sale system) and your social media pages. If you want to start your website on your own, it should cost about $250 to begin. Other marketing costs are at your discretion.
Photography and modeling. You can’t sell online without photography—nor can you post on social media without content. If you focus on using amateurs for both, you can usually get decent photography of your clothing for about $1,500.
Staffing. It doesn’t matter whether it’s just you or you actually have hired staff, you will have to pay them, and that is determined by the other choices you make for your budget.
Delivery costs. Especially if you’re selling online, you’ll need to put into your budget the possibility of delivery costs.
Physical storefront costs. While you can do the rest for about $10,000, this is where, if you want it, the costs can skyrocket. A building can be about $20,000 to $50,000 upfront, so consider whether you want to start an online business or want your own storefront before taking it to investors.

Talk to your friends and family first

To make things easier on yourself, it’s best to talk to your trusted family and friends before you start to seek out other investors. Why? Because you’ll usually have to prove yourself the least to those who love and care about you. It can also be a very stable option, as friends and family members typically ask for low payback rates or interest rates. That being said, though, make sure you can trust them. You should also approach them in the same way that you would a bank or another investor—with information, proof of concept, and a budget. Your attention to detail will help make your family understand that you are in this for the long haul and aren’t just asking for their money without a plan.

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Network with people in your business

Whether you’re attending events or meeting with other potential clothing brand owners, make sure you start to create your network. Whether they become investors or just helpful advisors, they’re going to be able to share their experiences—so you don’t make the same mistakes they did. Use their advice, but also know that you’re a different business owner, so don’t feel as though their thoughts and choices are the same as yours. Regardless, build a group of helpful people around you. You never know who they may know that would be interested in investing in your business.

Consider crowdfunding platforms

Once you confer with your friends and family, if you find yourself needing more funding, consider going for a crowdfunding platform. We’ve all seen something like it before—whether it’s on something like GoFundMe or Kickstarter, or something even more specific like StartEngine or SeedInvest, make sure you consider the rules and regulations for each one before you decide how to proceed.

There are three types of crowdfunding to consider: reward based, equity, and debt. Reward based is when the donations are usually small with potential stages of donations—and each stage means that you’re giving out something in return once your business is funded. Whether it’s a certain level for a certain clothing item once it’s manufactured, it doesn’t matter—with those donations mean you’ll be giving something back.

The other form is equity crowdfunding. If you’re looking for thousands of dollars per investor, this is where you should be focusing your search. When people invest in businesses this way, that means that if you are successful, then they’ll be owning a percentage of your business.

The third form is called debt crowdfunding or peer-to-peer lending. Investors can decide after you fill out a form whether they want to invest in you or not. They will provide an investment and you will pay it back with interest depending on the agreement.

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Investigate possible angel investors or venture capitalists

They’re not just mythological—angel investors exist! What does that mean? These are people who have already made their money in their field and are looking to help another small business. These people are searching for equity, so they’ll own a part of your business if they donate. Often, these angel investors want to be involved in your business, so make sure you meet with the potential investor and learn more about them to see if they match with your business values.

Now that you’ve considered angel investors, what is a venture capitalist? Similarly to the angel investor, they’re looking for a company that would grow quickly and expect at least half of your business equity and decision making power. This is usually one of the hardest types of investors that you would find and can be one of the most complicated to work with, so don’t make that decision lightly.

No matter what you do, provide value

Investors are looking for a business that they think will be successful. Show off your brand with your business plan, provide your budget, and outline everything that you wish to be, but also bring in your personality. Investors don’t just want to sink their money into someone who thinks they’re making a quick buck. They want to invest in a business that they believe in, that they can stand behind, and that will stand the test of time and give them their investment back in the long run. Make sure you stay focused on your end goal, enthusiastic about your business, realistic about your numbers and what you’ll need to do to stay afloat, and you will benefit—more investors will be interested in working with you because you’re grounded, you’ve researched the possibilities that your business might face, and you have strong values and a mission for your business.

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