How to Best Fund Your Start-Up Sportswear Brand?

Starting a sportswear brand is an exciting venture, combining the passion for athleticism and fitness with creativity and business acumen. However, like any start-up, launching a sportswear brand requires a substantial amount of capital to cover design, manufacturing, marketing, and distribution.

Whether you’re creating eco-friendly activewear, performance-enhancing gear, or trendy athleisure, securing funding is one of the most crucial steps in bringing your vision to life.

At Blue Associates Sportswear, we have dedicated the last 15 years to working with entrepreneurs, helping them bring their vision to life. We work with around 45-50 clients at once from all over the world and across all different sporting sectors, including Cycling, Running, Equestrian, Golf, Gym, Athleisure and Teamwear to name a few.

Here’s a comprehensive guide on how to fund your start-up sportswear brand.

Step 1: Create a Solid Business Plan

Before seeking funding, you need a clear and convincing start-up business plan. Investors and lenders want to see that you’ve thought through every aspect of your startup business.

Even if you don’t need investment, having a clear plan with iron out any potential cashflow issues before they arise. Read our blog on “How to Write a Business Plan”

A solid business plan should include:

1. Market Analysis: Identify your target audience, competitors, and unique selling points (USPs). For instance, does your sportswear cater to sustainable consumers or elite athletes?
2. Budget and Financial Projections: Provide a detailed breakdown of costs, including design, materials, production, packaging, marketing, and logistics. Also, project your expected revenue and profits over the next 3-5 years.
3. Marketing Strategy: Outline how you plan to build brand awareness and attract customers. Include strategies like social media marketing, influencer partnerships, and pop-up stores.
4. Brand Story: Share your mission, values, and vision. A compelling brand story can make your pitch more memorable and relatable to potential funders.

Step 2: Bootstrapping

Bootstrapping means funding your start-up business with your own savings or revenue generated by the business itself. Many successful sportswear brands started small, using personal funds to cover initial costs of design, tach packs, sourcing, sampling and production for the first batch before scaling up.

Tips for Bootstrapping:

• Start with a small product line to minimise initial costs. We recommend a minimum of 5-6 styles for your launch.
• Leverage free or low-cost marketing platforms like Instagram and TikTok to build brand awareness. Build a following and community that engage with your brand.
• After your initial launch, look to launch 1 style at a time to reduce cost of stock and focus your energy and finances on 1 product at a time and build slowly.

While bootstrapping gives you full control over your business, it may limit your ability to scale quickly. However, it’s a good option if you want to retain complete ownership of your brand.

Step 3: Crowdfunding

Crowdfunding has become a popular way for start-ups to raise capital while building a loyal customer base. Platforms like Kickstarter, Indiegogo, and GoFundMe allow you to pitch your idea directly to potential customers and supporters.

How to Succeed in Crowdfunding:

1. Create an Engaging Campaign: Use compelling visuals and videos to showcase your sportswear designs and explain why your brand stands out.
2. Offer Incentives: Provide backers with rewards such as discounts, exclusive products, or limited-edition items.
3. Promote Your Campaign: Use social media, email marketing, and PR to drive traffic to your crowdfunding page.

Crowdfunding not only provides funding but also helps validate your idea. If people are willing to invest in your sportswear, it’s a strong indication of market demand.

There are some secrets to creating a successful campaign which we share with our clients.

Step 4: Seek Angel Investors

Angel investors are individuals who provide capital to start-ups in exchange for equity. Unlike venture capitalists, angel investors often invest smaller amounts and may take a more personal interest in your business.

Beware that Angels require a return and the brand will need to deliver on its projections. Angles invest to make money and protecting your business isn’t on their radar first. We have seen many brand kill their reputation and brand values to answer to the need of greedy Angels who force turnover and ROI to recoup their investment.

Finding Angel Investors:

• Networking Events: Attend start-up and industry-specific events to meet potential investors.
• Online Platforms: Use platforms like AngelList and SeedInvest to connect with angel investors.
• Local Investor Groups: Research angel investor groups in your area, especially those interested in fashion, sports, or lifestyle brands.

When pitching to angel investors, emphasise your sportswear brand’s growth potential and how their investment will help you achieve specific milestones.

Try to execute the design and sampling so investors have something physical they can touch and make sure you have the business ready to go, so when the investment lands, you can execute fast.

Step 5: Venture Capital (VC)

If your sportswear brand has significant growth potential, you may attract interest from venture capitalists. VCs typically invest larger amounts than angel investors but often require a substantial equity stake and a say in business decisions.

How to Attract Venture Capital:

1. Show Traction: Demonstrate that your brand has a growing customer base and strong sales.
2. Highlight Scalability: Prove that your sportswear brand can scale quickly and capture a significant market share.
3. Build a Strong Team: VCs invest in people as much as ideas, so assemble a team with industry expertise and a track record of success.

While VC funding can accelerate growth, it’s not ideal for every start-up. Make sure you’re comfortable with giving up some control before pursuing this option.

Note also that many VCs don’t touch Start-Ups unless they have something very unique with fast growth potential. Many VC’s look to invest in brands that have a turnover of £2M+

Step 6: Small Business Loans and Grants

For entrepreneurs who prefer debt financing over equity financing, small business loans and grants are excellent options. Banks, credit unions, and online lenders offer loans tailored to start-ups, while various organisations provide grants for specific industries or demographics.

While a loan may put you personally at risk as many lenders would require a guarantee, it does mean you stay in full control. Make sure you take advice on what you can afford and the term of the loan is long enough not to put too much strain on the business or sales growth.

How to Secure a Loan or Grant:

• Prepare Financial Documents: Have your credit score, business plan, and financial projections ready.
• Research Options: Look for loans with favourable terms and grants that align with your niche, such as sustainability or female entrepreneurship.
• Apply to Multiple Programs: Increase your chances of approval by applying to several lenders or grant providers.

Keep in mind that loans must be repaid with interest, so calculate your repayment capacity carefully before borrowing.

Step 7: Partner with Strategic Investors

Strategic investors are individuals or companies that provide funding in exchange for equity or other benefits. Unlike traditional investors, they often bring industry expertise, connections, and resources to the table.

For example, partnering with a sportswear manufacturer or a fitness influencer could give you access to production facilities, marketing channels, or a built-in customer base.

Tips for Finding Strategic Investors:

• Attend industry trade shows and conferences.
• Reach out to professionals in your network who have experience in the sportswear industry.
• Be transparent about how their involvement can benefit both parties.

At Blue Associates Sportswear, we have acquired equity in some projects in return for services, guidance and mentorship.

Step 8: Licensing and Partnerships

Another way to fund your start-up sportswear brand is through licensing agreements or partnerships with established brands. Licensing allows you to use a well-known brand’s name or logo on your products in exchange for a royalty fee.

Advantages of Licensing:

• Gain credibility and visibility by associating with a recognised brand.
• Reduce marketing and branding costs.
• Access the parent company’s distribution network.

While licensing can boost your brand’s profile, it may limit your creative freedom. Be sure to negotiate terms that align with your vision.

On the flip side, you may have a product that you license to a brand to fill a sector of their market that they don’t have covered. Make sure you have a tight contract in place and they provide projections and sales forecasts that must be met.

By licensing your product to an established brand, you don’t need to manage production, sales or marketing and take a slice of what the brand sells.

Step 9: Retail Partnerships

Collaborating with retailers is another way to secure funding while expanding your reach. Many retailers are open to working with start-ups that bring fresh, innovative products to their shelves.

How to Approach Retailers:

1. Research Potential Partners: Identify retailers whose values and customer base align with your brand.
2. Present a Professional Proposal: Include samples, a lookbook, and details about your production capacity and pricing.
3. Offer Exclusive Collections: Retailers may be more willing to invest if you provide exclusive product lines.

Retail partnerships can help you scale quickly, but they also come with challenges, such as meeting large orders and negotiating favourable terms.

Step 10: Revenue Reinvestment

If your sportswear brand generates initial revenue, consider reinvesting it back into the business. While this approach requires patience, it allows you to grow organically without taking on debt or giving up equity.

Strategies for Revenue Reinvestment:

• Use profits to expand your product line.
• Invest in marketing campaigns to increase brand awareness.
• Upgrade your manufacturing process to improve quality and efficiency.

Reinvesting revenue is a long-term strategy, but it can lead to sustainable growth and greater financial independence.

Funding your start-up sportswear brand may seem challenging, but with the right approach, it’s entirely achievable. Whether you choose to bootstrap, crowdfund, seek investors, or apply for loans, each funding method has its pros and cons.

Remember, the key to success is not just securing capital but using it wisely to build a brand that resonates with your target audience. By staying focused, creative, and persistent, you can turn your sportswear start-up into a thriving business.

Your journey to creating a successful sportswear brand starts now—are you ready to take the first step? If so, please get in touch.