Can a fashion brand successfully crowdfund?

Given my background in the fashion industry, and now as a crowdfunding consultant, I often get asked whether fashion businesses can successfully crowdfund.

Nervousness seems to centre around three issues, which I'd like to address here...

Could it be bad for the brand to be seen to be asking for money?

This is purely a mindset issue I think. Entrepreneurs often want to project to the world that they are super successful, and no more so than in the fashion world where your brand is everything. However, there are very few businesses that are able to scale significantly without an injection of capital, particularly in fashion where it can take a while to build a brand and get to break even. So instead of thinking that you are going to the investment market cap-in-hand begging for money, understand that you are offering investors the opportunity to join your journey and benefit from your success as you build your business. Once you have that new mindset, doors will open for you.

Isn't crowdfunding just for all those cool new tech companies?

Crowdfunding has been successful for businesses across all sectors, particularly those that are consumer facing. True, there is often a tech element to those businesses, but not always. And although tech businesses can offer higher multiples on returns, they are often more risky investments that more traditional and proven businesses like fashion and retail can be a great addition to an investor's portfolio. If you have a very clear USP, with a large addressable market, and are proving strong traction in that market, then you have a good chance of making crowdfunding work for you. And a huge additional benefit will be all those new investors who will become your biggest brand ambassadors, spreading the good word and helping you grow your revenues faster. The following fashion brands have between them raised £4.8m on crowdfunding, which really proves the point - check out A Suit That Fits, Beulah, ILoveGorgeous, Upper Street, Vibrobarefoot, Wool & The Gang, and The Vampires Wife.

What if the campaign fails, how would this be perceived?

Around 50% of all crowdfunding campaigns fail, and in all honesty it's not going to be good for your brand if you don't reach your crowdfunding target. So rather than let this stat put you off, instead you need to think carefully about how you can make sure that you're one of the 50% of businesses that succeed. Crowdfunding isn't easy, and you need to invest significant time and resources in preparing your pitch, securing cornerstone investment, and running your campaign effectively. Bring in expert resource to help you plan, manage and execute your crowdfunding to give you the best chance of success.

If you're a fashion brand that's thinking about crowdfunding, please drop me an email to book a free half hour telephone consultation - I'd be really happy to give you a steer as to whether your business could successfully crowdfund, and get you started on a plan of action.

Julia Elliott Brown is founder of crowdsourcing consultancy Enter The Arena. She will be speaking at our Masterclass on Raising Finance for Starting Out & Accelerating Growth on Tuesday 8 November at Andaz London Liverpool Street. Tickets costs £65 + VAT. Use promo code VIP20 for a 20% discount. Book here.