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Yves St Laurent studied under Dior. Donna Karen worked for Anne Klein. Tom Ford was a design assistant to Cathy Hardwick. Starting a career as a fashion entrepreneur, or in any of the creative industries, does not follow the typical entrepreneur’s journey. In fashion, the apprenticeship model reigns supreme.
Roberta Annan started the African Fashion Fund (AFF) in part to make it possible for African designers to have access to global apprenticeships. “I believe in apprenticeship. It’s so important. If you look at all the major fashion brands in this world, they worked under somebody before they became big. I wanted to find a way to promote that,” she said. Through their fellowship program, AFF has helped placed African designers in apprenticeships in New York with designers such as Bibhu Mohapatra and EDUN of LVMH. AFF covers all of the associated costs.
Annan’s work on the fellowship program taught her that “visibility is not enough. There are still serious challenges that these businesses face.” The AFF began to complement their fellowship with access to markets. They placed brands in showrooms. Through that, they realized that once the orders were made, designers faced problems in production and manufacturing. It became clear that you needed to control the value chain from an idea to the ethical sourcing of materials to production to retail in order to make a profitable fashion brand in Africa. And of course, to produce a line, you need money. So, AFF started doing angel investments.
Last November, the AFF increased their capability to finance creative businesses in Africa. Through a partnership with the Ethical Fashion Initiative under the United Nations International Trade Center, they launched a 100M Euro fund, the Impact Fund for African Creatives. Their mandate is to invest in creative businesses continent-wide, but they will have a “strong focus on West Africa” where there has historically been less capital available. The Impact Fund for African Creatives will start by developing an accelerator to build a pipeline of viable fashion businesses. At the end of the accelerator, which will focus on all aspects of the fashion business, the designers will showcase their brands at a major international fashion week.
If you are an African designer reading this, I am sure that you are asking yourself, “How can I get into this program and inject some of this capital into my business?” Luckily, Annan shared the three things she looks for when she is evaluating a creative business for investment.
If you are at the idea stage, she’s looking for originality, commitment, and adaptability.
When Annan meets a creative, the first thing she is looking for is originality because it means that “the creativity has to come from within.” She can immediately tell if a design delivers a unique perspective or is simply a copy by the passion in the entrepreneur’s eyes and voice. “When somebody has a long-term vision for an idea, that is convincing to me as an investor. This is someone who is not just going to give up this idea. They have to stick with what they believe in,” she shared.
Second, and tightly related to originality, is commitment. Annan understands that there are challenges when starting a business in the African context. She had her own challenges when trying to get the African Fashion Fund off the ground. Despite this, she must be convinced that the entrepreneur will not lose sight of their dream. “People invest in people. They invest in their passions. I invest in you because I know you are going to stick with it regardless of the challenges,” she said. When she meets an entrepreneur, she looks for “the fire in the belly. Something from within that makes you want to survive.” The people who survive as entrepreneurs are those who never give up.
The third attribute she looks for is adaptability or malleability. Annan believes that you have to “drive your own passion, but if you are not willing to adapt your model to what an investor or a business advisor may want then it is difficult to work with that person.” There is a big difference between someone who wants to simply make art and one who seeks investment so that they can commercialize it. One of the biggest areas of disagreement is on the value of the business. According to Annan, “designers value their company based on how much people like them or how much exposure they have in the media” while investors will do a valuation from the business’s financial statements.
If you are past the idea stage and actually are running your creative business, “it becomes a numbers game.” At this stage, Annan is also asking herself, “How quickly can they adapt this to other markets?” While she wants her designers to contribute to an increase in intra-African trade, she is also looking for designers who can acclimatize to markets in London or Milan.
The second question she is asking is, “Are they ready for scale?” Being ready for scale means that they already have a strong team running the business with solid production and manufacturing processes. She is looking for businesses who are “ready to run with the investment.”
Finally, commitment remains critical although at this stage it’s taken on a new flavor. It’s no longer just about sticking through the tough times, but also a commitment to the bigger vision.
Annan’s vision for The Impact Fund for African Creatives is big. The Fund’s goal is to return 250M Euro from their 100M Euro in investment. Annan tells entrepreneurs who are thinking about seeking investment from her fund to ask themselves, “Are you willing to go with me on that journey? Because it’s going to be a tough journey.” If they do make it through, then not only will they be generating wealth and elevating the work of African designers on the global stage, but also will be the designers who will give the next generation of African designers their start.
January 31, 2019 at 03:35PM
Forbes – Entrepreneurs