Financing a Start-Up: Fledgling Designers Court Kin, Kindness

With a keen fashion sense and some business savvy, or a numbers-wise partner, ambitious young designers are attracting some financial backing.

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Allan Ellinger, MMG

Photo By WWD Staff

WWD Image

Photo By WWD Staff

NEW YORK — Talent-rich, dollar-poor designers are struggling not only to stand out artistically, but to survive financially.

However, with a keen sense of fashion and some business savvy — or at least a numbers-wise partner — ambitious young designers are attracting at least some financial backing, even in the economic doldrums following the go-go Nineties.

For many budding talents, their first financing deal requires not a trip to Wall Street, but a sit-down at the kitchen table.

“You need people to have an emotional reason to invest in a young design talent, and usually it’s friends and family,” said Allan Ellinger, senior managing director of consulting firm MMG.

Even rising star Zac Posen, whose business is a family affair, recently said he’s fueled by “caffeine and cookies,” and “the love and support of good friends and family.”

There’s a pitfall here for Mom and Dad, though: Since young talent often doesn’t know how to take capital and deploy it sensibly, they end up spending a lot of money with little to show for it, said Ellinger. To avoid this, designers need to find their inner business sense. “All young designers have a vision, but there is a balance between art and commercialism, and good designers know how to balance it.”

Jack Mascharka, whose inaugural sportswear collection will make its debut next spring, is financing the endeavor with the help of his father. “The last thing the world needs is another designer because there is not a huge return on one’s investment,” said Mascharka, who picked up experience working for numerous other start-up designers as well as a few established names such as Betsey Johnson. “I knew the only way to have that investment in place is to have your friends and family behind you because you need an investor who is passionate about it.”

An investor offering monetary support without an emotional connection is more apt to leave a younger designer before his or her big break, which could disrupt a start-up’s momentum, slow purchasing, disrupt critical deliveries and delay that elusive character, stardom.

Designer Alice Roi said newcomers need to be inventive. “Definitely for shows, there are a lot of opportunities out there to get sponsorship,” she said, noting that she’s formed relationships with companies hailing from worlds as disparate as hair, makeup and champagne. “There are a lot of people out there who want to be viewed by the more fashionable set.”
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