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MenuHow can I find investors for a start-up in luxury fashion?
Looking for a list of investors who would consider a ticket size of $1-5 million for a couture house.
Answers
Angel.co and gust.com are two places to start. I would also buy premium access to matermark.com provides a full list of Venture Capitalist by sector who has invested in what and what are their portfolios composed of
One of my clients received $500k funding ONE week after we did our pitch coaching session. What they learned from our session is to be 100% focused and not to follow the "scatter gun approach" that they had for the 9 previous months.
Another client was looking for 50 investors, and after our coaching in 3 weeks he raised 65% of the funds he needed from 2 investors! He said
"After our coaching session, the big change was that I realized that I just needed to approach confidently the bigger investors first."
You can create very quickly a list of investors interested in your field if you ask the right questions and understand your business, and industry like a pro.
Then you can start creating a more effective and efficient investors pipeline.
Basic questions to have answers to are:
• Who will be interested in your couture house?
• Who will benefit from seeing you succeed?
• Who will be hurt from seeing you succeed?
• Who was in your shoes when they started?
• Who is not yet in the industry and wants in?
• Who are all the richest players in your industry?
Other questions you will need to look into once you've got a list of investors to approach is:
1. How do you create a dynamic in which angels and investors WANT to meet you... rather you wanting to meet them?
2. What is your strategy for meeting angels / investors, for having conversations with them and for building useful relations with them?
3. How do you present your pitch?
4. What kind of questions do you ask angels / investors?
If you want to dive in further on how you can raise the money your couture house, get in touch to arrange a call.
This is such a broad question. If you want a list, here is a list: http://www.entrepreneur.com/vc100
There is so much more to your question. Do you have revenue, do you have a current business, have you designed clothing before, have you manufactured clothing, there are so many things that I'd ask you to get a better idea of what investor you'd want to go after. However there are plenty of "lists" out there.
I have 25 years of experience working with early stage technology companies and investors.
I’m often asked about fundraising strategies for VC funds and angel investors. After raising capital and exiting from multiple startups and investing through 15 venture funds and dozens of angel investments I have seen thousands of deals.
I’ve found that the most productive use of time for both of us is scheduling a call through my profile.
There is more than one way to approach fundraising and to get noticed by those with the capital you need to get to the next level. Even the best funded and hyper-successful billion-dollar start-ups have been engaging in more fundraising rounds than ever before. Luxury Fashion brand Start-up can attract Investors in the following ways:
1. Online Fundraising Platforms
The past five years have given birth to virtually countless online fundraising platforms. They have become highly popular with sophisticated and accredited individual investors, angels, and even banks and funds looking for new ways to deploy capital. Even if you do not use online platforms to raise all the money you want, they can be powerful for getting noticed.
2. Social Media
Social media can be your best friend as a lean start-up or solo entrepreneur looking to test the market, gain traction, and attract investors. If you can get the social profile handles of well-fitting investors, it might only take one great message to connect with the capital your start-up needs. If this sounds like a fit for you, check out this Forbes article with the LinkedIn contact information for the top 50 angel investors based on investment volume. In the event you need VCs you can always go to Crunchbase and research for those investors that are actively investing in your industry. LinkedIn for cold messages or to seek quality introductions to pass the social proof with guarded investors such as Venture Capital investors. Simple emails have proven to be able to get the attention of notable angel investors and VCs.
3. Apply to Accelerators
Popular start-up accelerator programs always have an open invitation for applications from serious entrepreneurs. If accepted, you will likely get a modest check to keep developing your work, as well as introductions to other investors, business advice and help in staging future fundraising rounds. This is when the start-ups attending the program pitch to a crowd of investors.
4. Start Sharing Your Product
Fundraising and growth needs to be strategic to be successful. Yet far too many entrepreneurs and start-ups are not focusing enough on just getting their product or service out there in the hands of customers, influencers, and in turn, in front of investors. When you do, you can achieve better terms, from better investors.
Related Questions
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What due diligence should be expected for a seed investment from seed fund(s) and individuals?
Very little. At the angel/seed stage, they're investing in the founders, so there's no expectation of patents, etc... They might check that you're incorporated in good standing, and ensure you have a solid startup/corporate lawyer, and have good employment and IP ownership agreements with your staff and contractors, and that's about it.JM
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How much equity is typically taken by investors in a seed round?
From my experience I would not advise you to go with Venture Capital when you're a start-up as in the end they will most likely end up screwing you. A much better source for funding would be angel investors or friends/family. The question of how much equity should I give away differs for every start-up. I remember with my first company I gave away 30% because I wanted to get it off the ground. This was the best decision I ever made. Don't over valuate your company as having 70% of something is big is a whole lot better than having 100% of something small. You have to decide your companies value based on Assets/I.P(Intellectual Property)/Projections. I assume you have some follow up questions and I would love to help you so if you need any help feel free to call me. Kind Regards, GiulianoGS
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VCs: What are some pitch deck pet peeves?
Avoid buzzwords: - every founder thinks their idea is disruptive/revolutionary - every founder says their financial projections are conservative Instead: - explain your validation & customer traction - explain the assumptions underlying your projections Avoid: - focusing extensively on the product/technology rather than on the business - misunderstanding the purpose of financial projections; they exist in a pitch deck to: a) validate the founders understanding of running a business b) provide a sense of magnitude of the opportunity versus the amount of capital requested c) confirm the go-to-market strategy (nothing undermines a pitch faster than financial projections disconnected from the declared go-to-market approach) d) generally discredit you as someone who understands how to build a company; for instance we'll capture 10% of our market, 1% of China, etc. Top down financial projections get big laughs from investors after you leave the room. bonus) don't show 90% profit margins. Ever. Even if you'll actually have them. Ever. Instead: - avoid false precision by rounding all projections to nearest thousands ($000) - include # units / # subscribers / # customers above revenue line; this goes hand-in-hand with building a bottom up revenue model and implicitly reveals assumptions. Investors will determine if you are realistic, conservative, or out of your mind based largely on the customer acquisition numbers and your explanation of how they will be achieved. - highlight your assumptions & milestones on first customers, cash flow break even, and other customer acquisition and expense metrics that are relevant Avoid: - thinking about investor money as your money - approaching the pitch from your mindset (I need money); investors have to be skeptics, so understand their perspective. - bad investors; it's tempting to think that any money is good money. You can't get an investor to leave once they are in without Herculean efforts and costs (and if you're asking for money, you can't afford it). If you're not on the same page with an investor on how to run/grow the business, you'll regret every waking hour. Instead: - it's their money; tell them how you are going to utilize their money to make them more money - you're a founder, a true believer. Your mantra should be "de-risk, de-risk, de-risk". Perception of risk is the #1 reason an investor says no. Many are legitimate, but often enough it's simply a perception that could have been addressed. - beyond the pitch, make the conversation 2-way. Ask questions of the investor (you might learn awesome things or uncover problems) and talk to at least two other founders they invested in more than 6 months ago.JP
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What happens to a convertible note if the company fails?
Convertible notes are by no means "earned." They are often easier to raise for early-stage companies who don't want to or can't raise an equity round. Equity rounds almost always require a simultaneous close of either the whole round or a defined "first close" representing a significant share of the raised amount. Where there are many participants in the round comprised mostly of small seed funds and/or angel investors, shepherding everyone to a closing date can be very difficult. If a company raises money on a note and the company fails, the investors are creditors, getting money back prior to any shareholder and any creditor that doesn't have security or statutory preference. In almost every case, convertible note holders in these situations would be lucky to get pennies back on the dollar. It would be highly unusual of / unheard of for a convertible note to come with personal guarantees. Happy to talk to you about the particulars of your situation and explain more to you based on what you're wanting to know.TW
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What exit strategies do angel investors want/prefer for a service business?
Keep in mind that investors invest for returns. Telling a prospective investor that you want his or her money to grow your business but don't plan on ever generating a liquidation event that pays him or her a dividend is not likely going to work; angel or not. You may be better served with debt financing where returns are generated in the form of interest payments not equity value growth. BUT, if equity financing is the plan, you're going to want to develop a strategic exit plan right from the start. That means identifying prospective buyers, strategic channels etc and characterizing the value drivers for each right up front. You'll find prospective buyers come in a number of forms; competitors, bigger versions of you, strategic partners, private equity, etc. Each will value your business in different amounts for for different reasons. Understanding this is vitally important for you to navigate to securing the right money, from the right sources, with the most favorable terms. Once you've qualified and quantified each of them, then determine what (specifically) you're going to need to do to align your business with those prospective buyers generating the highest returns. This will drive your business model and go to market strategy and define your 'use of funds' decisions. This in turn result in a better, more valuable business whether you exit or not. Do it this way and you'll have no trouble raising money from multiple sources. You can learn more about the advantage of starting with a Strategic Exit plan here: http://www.zerolimitsventures.com/cadredc Good luck. SteveSL
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