Young designers find it difficult to secure funding at the start-up phase of their business. Beyond going to the "Bank of Mum & Dad" or securing a bond with the well-off cousins, where does a young entrepreneur go to find backing for her/his new fashion venture?
Since the 2008 financial crisis, High Street banks have been reluctant to lend to small businesses and investors want to see millions in turnover before even considering an email from a prospective business. The UK boasts an insane amount of fashion creative graduates which is great, but also presents a small numbers problem: so many creatives, so little start-up resources. In a way, it really is 'survival of the fittest', but does a Machiavallian approach to business have to be the only avenue? Not necessarily. I've seen three opportunities for fashion aspirants who need a bit of a leg up in the industry, who are too small for the venture capital stage, but too big to carry on creating small collections in their bedrooms.
The Redress Asia EcoDesign Competition provides an "X-factor" opportunity for designers to make their debut at Hong Kong Fashion Week. Originally, just open to fashion designer hopefuls in mainland China, Hong Kong, Taiwan and Singapore, this year the competition was opened up to European contestants from France, Belgium and Germany. The winner will collaborate with Espirit to create a new collection by recycling the brand's textile manufacturing waste. The experience of working industry is topped up with a 3,000 Euro cash prize.
AudaCity of Fashion is a crowdfunding platform for fashion creatives. It does exactly what the more established crowdfunding platforms do, but because there is a curatorial process, the design standards are higher than say, a t-shirt project. Fresh from a successful stint at Berlin Fashion Week last month, London designer Ada Zanditon is currently leveraging her support and running a campaign to fund a fashion film for London Fashion Week. This is an opportunity for fashion creatives (not just designers) to secure funding for their projects through the support of their 'crowd'. For all intensive 21st Century purposes, that would be one's 'followers' on Twitter and to a lesser extent one's 'friends' on Facebook. These projects don't necessarily have to be collections, but can also be a lateral creative proposal as is the case with Zanditon's fashion film project.
The British government has a start-up loan scheme for fashion businesses led by young people between 18-30. The interest is a bit high at 6% but it is better than financing on a credit card. The real value of the scheme is the business mentoring that one receives on the scheme. In a way, this makes up for the High Street banks' reluctance to lend to small business, however, not everyone starting a fashion business is under 30.
Of the these three avenues for funding, I think the crowdfunding route through AudaCity of Fashion provides the best return on investment. The design competition is great if your aspiration is to get a flavour of Hong Kong Fashion Week and to work with Espirit. If that isn't your bag, then you're looking at taking out a loan. If you already have consumer debt on top of a student loan, borrowing yet more money may not be top of your list. With crowdfunding, you have complete control over the campaign and if you are social media savvy with a solid following and a great idea that you are confident said followers would want to support, this is the way to go. Just have look at American musician, Amanda Palmer's TED Talk, she turned the music industry on its side with her crowdfund campaign. Fashion creatives could take a leaf out of Palmer's book and also look to harness the potential of crowdfunding to disrupt the fashion food chain.