fashion fund sac

7/21/2019 Fashion Fund SAC

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Equity Crowdfunding is about to

undergo a major facelift



u g j

“opening up investment in private companies will

help diversify the types of companies that getfunding. It will also help develop a more diversegroup of investors. ”

ERIN GLENN, CEO, QUIRE



ON TREND . SOPHISTICATED . FASHION FUND



•

Rockstar team from Estee Lauder, McKinsey etc.• Many collective exits

• Deep background in regulatory compliance

•

Understand the “business of fundraising”• Plan to specialize in Regulation A+

Who We Are



Startup investing: no longer just for rich

• On Oct 30, the SEC finalized rules to give regular peoplethe opportunity to make investments previously limitedto big-money folks.

•

SEC voted 3-to-1 to open up equity crowdfunding to amuch wider group of people. Startups will now be ableto raise up to $1 million a year via online platforms.

•

At the center of the change is the JOBS Act, whichpassed three and half years ago with bipartisan supportin Congress. Much of the law has already beenimplemented.



•

Commissioner Kara Stein noted that the SEC willconduct a three-year study to evaluate howcrowdfunding develops. "Let's see how this experimentworks," she said.

•

Supporters of the JOBS Act say the change will level theplaying field for investors, while also giving startups theability to raise money from more people.

•

Critics fear the requirements for startups seekinginvestment will be too demanding, or that unschooledinvestors could lose their money.

Power to the People



Title III: The Diversity Antidote

•

Lack of diversity starts with venture capital firms. Inthe tech community, VCs are the arbiters of whatlives by deciding who gets funded.

•

Study after study has shown that VC firms arelargely run by White/Caucasian men. Merely 8.2% ofVC firm decision makers are female, and roughly 2%are Black or Latino.

•

Wielding this power, VCs tend to fund founders whosolve problems they can most relate to, and who aredemographically similar to themselves. This has ledto female and minority-founded businesses being

vastly underfunded.



Title III: Diversity Data

Data curated from Mattermark and Quire’s recent Startup Investing Survey



Title III: Qualification Delta




Title III: Investor Financial Knowledge




Title III: Investor Motivations

•

No doubt, people invest to make a financial return.94% of our respondents marked that as a reason.

•

70% of respondents had additional motivations for

investing. For them, investing isn’t where they eithermake millions or they lose.

• For instance, the majority of our respondents wouldalso invest to support a company’s mission and

founders. And nearly half would invest to spurinnovation and job creation.

• These motivations aren’t surprising.



Title III: Investor Motivations




Title III: Conclusions

•

The SEC should certainly implement appropriatesafeguards to protect investors, but we urge them tomeet their mandate and allow everyone to invest instartups by finalizing Title III.

•

We hope these results helped shatter some of themyths that are used to support the current

prohibitions. And we hope that they shed light on thegreat impact that Title III can have when it’s finalized.



WHY



“Fashions fade. Style is eternal”YVES SAINT LAURENT



Equity Investors by Category




Only viable source of equity funding for most fashion,design and hardware deals

• Significant upfront costs are required to finance the

production over a period of months/years

•

Revenues will not be generated until the productionis complete

•

Investment is highly speculative (no guarantee thatthe production will be a hit, however well made)

Equity Crowdfunding for the Creative Class



“A means of raising funds to support the development of abusiness through the issue of shares in return for money”

Benefits•

Money doesn’t need to be paid back•

Investor may bring added value to the business throughtheir knowledge/ contacts etc

Risks• Loss of control

- investor may influence the direction that the businesstakes in order to maximise the potential return on theirinvestment- once you’ve issued shares in your business, you may notbe able to control how these are subsequently traded

Equity vs. Debt



Growth potential – the business must be scalable

Market opportunity – is there a market for the product/ service?

Protection of assets - is their any IP in the business, and howwill this be protected?

You – who are the people behind the business? Are they“investable”? Have they got the drive, commitment and skillsnecessary to take the business forward?

Return on investment – how much money can I expect to makefrom the sale of my shares in X years time, if all goes to plan?

Risk – what is the likelihood of this business failing to achieve

it’s financial projections?

What Investors Look For



“Success is not a random act. It arises out of apredictable and powerful set of circumstancesand opportunities.”

` MALCOLM GLADWELL

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