Raising money for a fashion company and/or clothing line is always challenging.
00:00 So you haven't started or looking to start a fashion business and are searching for fundraising ideas for your clothing line. how to get funding for your fashion line and we're going to cover eight different ways you can raise money or get funding for your fashion. So we're going to talk about equity funding, debt financing, presales, strategic partnerships, consulting's, incubators, sponsorships and crowdfunding.
00:41 Equity financing or equity financing can be done in freeways, Angel Investment, vc funding or family and friends. So for this case, let's consider that you are either launching your first fashion line or you're launching a fashion tech company and you need money for MVP and you're looking to raise around $200,000. So Angel Investors and family and friends make sense when you're trying to raise less than $500,000. Vcs come into handy when you're trying to raise your series a which is at least over a million dollars.
01:31 So let's say if you're trying to raise $200,000, you will probably have a syndicate has between eight and 10 different angel investors who are going to find your $200,000. So the pros will be you get immediate cash on day one whenever you sign up with your syndicate. Number two, they provide expertise and connections. So make sure you just don't get any angel investor just because they have money trying to find the one who actually has connections or can open doors for you. Right? And the third thing is there, you don't have to pay them back, which is these are professional investors and they understand the risks.
02:42 The cons of doing money from angel or VC says, most likely they will require a seat on your board. Number two is they will take significant equity from your company. So something to keep in mind, right? The third is they may or may not keep an eye on your operations and get involved your day to day activities. And number four, which is very critical, especially if you're trying to raise money from VCs, is if you as a CEO is not performing well based on what they are expecting. They're expecting their expectations based on gross revenue users. Whatever your setup in the beginning, if you're not meeting those expectations, you can be pushed out of your own company by the board.
05:46 Debt financing. So debt is a loan you can get from banks, credit unions, a line of credit, and their pros and cons associated with debt financing. So first pro as it's comparatively easier to get money from a bank, then getting money from investors. Number two, there is no loss of equity. The con is if your business goes under, you will have to pay them back the money that you have actually borrowed from them. Number two is they will require some sort of collateral in exchange for the money
06:47 Number three is incubators. So there are multiple incubators depending on where you're located. So if you are in Silicon Valley, for example, we have YC, 500 startups that a lot of fashion incubator as well. So if you are in the early stage of businesses, you have some proven proof of concept. Usually, for about five to seven percent equity in your company, they will give you between 50 to $100,000 so at least it gets you going and gets you off the ground.
08:35 Number 4 is Presales, so from a customer's entice your customers that special incentive to get pre-orders from them. You don't necessarily have to utilize crowdfunding platforms from this, but you can take preorders on your own website. An example, if you're trying to sell a jacket, you know how you're going to upload image of six, six jackets in different colors and ask customers to preorder and it's whoever pet odors, you can give them 10, 20, or 30 percent discount and state that the top three most bordered colors of this jacket or most voted, most preorders that you get from whichever jacket.
09:27 Number 5 is through retailers, but this would require for you to build a relationship with the retailers and require some sort of negotiation negotiating skills from your site. So typically retailers, we'll pay you after the product sells, but if you build a relationship with them, you can negotiate them to get a deposit for your collection.
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