The ‘Need to Knows’ for Investment
29 April 2021
Author: Jasmine Waters
We’ve seen watched an episode of Dragon’s Den where a candidate has entered sweating, tripped over their words and not known their financial figures. Looking for investment isn’t often that dramatic in real life, but the process can often be a tricky one. With fashion retail looking to be an attractive investment opportunity in a post-pandemic world, what do brands need to know about the current market, and what should they remember if they want to team up?
What are investors looking for?
Particularly in the UK, there is a real appetite for those industries most hardly affected by the COVID-19 pandemic, with fashion being amongst them. There’s a general consensus that the hard hitters will see a dramatic spurt of resurgence as we return to some kind of ‘normal’, profiting from a gap left by the closure of many retail giants across the country. A similar thirst has been seen for online retail, with many keen to continue to back it because of how likely e-commerce is to continue to grow. Over the last few months, we’ve seen high-street titans buying each other out, and benefitting by bringing as much as they can into an in-house operation. Debt may be cheap, but acquisition is still extremely attractive. The gravitation towards the IPO route and e-commerce has opened up a window of opportunity for small brands and start-ups, especially for those that can help investors to meet the environmental, social and governance agenda (ESG), in anticipation of consumer demand.
How can brands best secure investment?
Alongside investors thinking small and sustainable, there are a number of checkpoints to meet when trying to secure a source of investment. In a hypothetical meeting, an early essential would be quickly getting across key points of differentiation. This may often refer back to your initial ‘light bulb moment’, starting with the idea behind the brand’s creation – even if your products and ideas have changed since. If – on average – people take away five things from a conversation, make any pitch a snappy one. Keep points consistent while remembering the basics, such as cash flow and revenue. If brands have been able to raise money alongside rising sales, it may well be a strong enough sell in itself. Articulate why a growth plan is structured in a particular way, while highlighting how a business can grow with the right investment – from extending product lines to opening new stores. If a business is pre-revenue, forecast how much money there is left to play with before thinking about selling it. Most importantly, accept that finding the right investment will take a considerable amount of time. Preparation can help navigate the post-COVID waters while investment appetite only looks to increase.
Image source: https://www.caspian.in/