Fashion Venture Capital Firms

The world of fashion is enormous, and a little extra money could not hurt either. Venture capital is money provided to seed early-stage, emerging and emerging-growth companies: venture capital funds invest in companies in exchange for equity, usually in businesses with a novel technology or business model. There is no venture firm exclusively for fashion in the classic sense — but venture capitalists can and do invest in fashion companies.

How Venture Capital Works

A fashion venture capitalist is an investor who either provides capital to startup ventures or supports small companies that wish to expand but do not have access to equity markets, investing in clothing, footwear or fashion-industry-relevant businesses. A fashion venture capital firm typically manages funds for high net worth individuals and invests them in potentially profitable fashion ventures; some of these businesses could be considered high-risk, but that is not always the case — the firms usually provide seed money to small or early-stage fashion businesses starting up.

The various types of venture capital are classified by their applications at the stages of a business: the three principal types are early stage financing, expansion financing and acquisition or buyout financing. Capital itself is a term for financial assets or their financial value, such as funds held in deposit accounts, as well as tangible factors of production including factory equipment; a venture is a risky or daring journey or undertaking. Fashion can be an adventure that requires capital, so startups can go on the venture while trying to reduce risk along the way.

Firms That Touch Fashion

Fashion Capital Partners is an investment company based in Paris aimed at investing in early-stage fashion and luxury tech startups and innovative high-end designers throughout Europe and the United States, helping its portfolio through a hands-on mentoring program — sharing best practices and assisting with strategy, business development, marketing and finance, and opening its own network so businesses can accelerate and succeed.

Simon Ventures is the retail-tech focused venture fund of Simon Property Group, investing in next-generation commerce and retail technology. Felix Capital is a venture firm for the creative class, at the intersection of technology and creativity, focused on opportunities in digital lifestyle — Felix means happy in Latin, and also lucky, which always helps for an investor. The Designer Fund's background runs through design roles at 500 Startups, Facebook's fbFund and Venrock, with investments in companies such as Wildfire, acquired by Google, and Behance, acquired by Adobe. Emerging designers considering this world can start from the emerging fashion designer term page and the fashion industry financial section, both linked here.

What Founders Should Know Before Pitching

Venture capital suits a narrow kind of fashion business: one that can grow very large, very fast, on an idea — a technology, a platform, a new model of commerce — whose value multiplies rather than accumulates. Most fashion businesses, including many excellent ones, grow the other way and are better served by other money. A founder pitching a fund should therefore expect the questions to test scale first: how big the market is, why the idea wins it, and what the equity buys that revenue cannot.