It’s safe to say that, despite the general doom and gloom in the market, things are going pretty well for the fashion industry. The sector is heading to $1T in revenues by the end of 2023 and is projected to reach a market value of $1.5T by 2027. According to Deloitte, more than 80% of investors have responded to this potential by expressing their interest in investing in the fashion and luxury sectors.

But this industry’s potency comes with its challenges. Fierce competition and the scrupulous, cautious approach investors have taken to gauging their options have made it harder for fashion startups to prove their worth and raise capital. While the fundraising opportunities are up for grabs, founders should be fully prepared to undergo the thorough selection process. 

In the last year, we’ve seen over 70 fashion pitch decks from startups worldwide and helped them raise over $50M in funding. In this article, we will share our experience to help you use the current tailwind to open the doors to VC funding for your startup.

You’ll learn what investors expect to see in fashion pitch decks, the tips and tricks to increase your chances of getting investor attention, the key challenges and mistakes to avoid, and examples of how others have successfully done it.

Before we get to the fashion pitch deck essentials and examples, let’s go through the most common problems we see in decks that you need to steer clear of.

Raise money with the free pitch deck template from Waveup

We are looking at a massive untapped opportunity

Why startups love our template:

  • Investor-proof narrative & design
  • Best practices from $3B+ raised
  • Powerpoint + Keynote

Success. We just sent the Pitch Deck Template from Waveup to your inbox.

Key mistakes to avoid in a fashion pitch deck

The following are the most common and problematic faults that sink the founders’ chances to secure the funding we’ve observed in numerous fashion pitch decks we receive. Let’s see what they are and how you can avoid them. 

Focusing too much on the product instead of customers’ pains

There is a big misconception that, in fashion, having a great product is enough to open all the doors. In reality, “great product” is a subjective notion that only becomes objectively great when your customers perceive it as such. 

Sounds harsh, but outside of the qualities that help solve your customers’ problems, your product doesn’t have value for investors. All they want to know is that your product will be successful on the market, and for that to happen, it must answer your customers’ pains. Focus on that.

Ignoring investment fundamentals 

90% of companies we worked with could dedicate five slides to their product and brand vision yet dismiss any information investors actually find important. This information includes data like the company’s traction, niche details, unit economics, journey to date, why now, etc. These are the things that signal to investors that you have what it takes to succeed and know the path to profitability, and skipping them won’t get you funded, that’s for sure. 

Not addressing the go-to-market strategy

Four out of five companies entirely skip the GTM information and focus on listing basic traditional marketing channels they will use to reach customers. And while your PR and influencer marketing activities do matter, investors, first and foremost, want to know how you plan to launch and deliver your new product to the market, which is what your GTM describes. 

It might include things like:

  • Distribution strategies, like relationships with retailers like Amazon or Bloomingdale’s
  • A social media community built around the brand
  • Partnerships in B2C or B2B space, etc.

These things show you have a clear distribution plan and relevant experience.

Providing a general market size instead of the serviceable obtainable market

It’s common for founders just to throw the value of the total addressable market (TAM) of the industry on their market size slide and make the standard argument, “If we reach only 1% of the market, we will make…”. But investors don’t buy into this lazy strategy because it doesn’t address the size of your actual target audience and its spending potential, which are the two things that show investors your real market potential.

Instead, it would help to zoom in on your specific market size niche. For this, you need to find your ideal customer persona (ICP), calculate how many of them are out there, how many of them are likely to buy, and at what average order value (AOV). This way, you present investors with a realistic and believable market prognosis and show them you know your market’s ins and outs.

Putting only one founder on your team slide 

We regularly see fashion pitch decks with a team slide consisting of one founder. This move begs a few questions: why should investors give you money if you couldn’t get on board anyone as excited about the product as you’re? And who will be executing your vision? 

Investors need to see a team of people who understand how to market and sell your product, how to organize operations, warehousing, distribution, and so on. They must be sure you have a strong team with enough experience to successfully build, launch, and scale a household name in fashion.

Instead of just putting a founder/visionary on your team slide and calling it a day, include everyone who plays a significant role in your company. Add a co-founder or other people who will be working on your product, and remember to demonstrate their experience. If you have a network that can help you get traction and visibility, showcase it, too.

Having a floppy financial model

Over ninety percent of founders we meet don’t have experience in finance, which results in unrealistic, unreasonable financial prognoses pulled out of thin air. The numbers in their model are too low compared to their funding ask (e.g., $2M of turnover in 3 years with a $3M ask today), making it a lousy deal for investors, or their projections are overinflated and detached from reality. Either way, it will result in long months of unsuccessful attempts to raise capital.

To avoid this problem, we suggest you dedicate more time to your financial model or hire a professional to ensure your numbers make sense. It includes:

  • Having a reasonable funding ask that meets your needs and stage of growth
  • Considering your pre- and post-money valuation
  • Having correct CAPEX and OPEX, sales efficiency, and conversion projections
  • Knowing and considering your CAC benchmarks, etc.

Failing to address the competition and your differentiators

In fashion, the competition is fierce and dynamic, so just positioning yourself as a “cheap,” “functional,” “luxury,” or “designer” is not enough. You must have an ace up your sleeve—a lever over your competition like a recognizable brand name, an extensive network, unmatched pricing, a unique business model, etc.

Show what problem your business solves for your customers

Your customers don’t just buy your clothes—they buy style, functionality, affordability, quality, and other things that cover their needs. By unearthing the deep-rooted issues that require solving for your customers, you highlight the value of your offering. The more acute the problem, the higher its value for the customers and, thus, the potential payout. 

So always leverage statistics to showcase the potential impact of your solution. It will help investors better understand the scale of the problem you are solving and your value proposition.

The Problem Slide for FemTech Startup
The Problem slide for a FemTech startup, example

This slide showcases the size and significance of the problem that the FemTech startup is addressing. FemTech startups are addressing a problem that affects millions of women worldwide. Through this slide, we will provide data and statistics demonstrating the extent of this issue and its impact on women’s lives.

The Problem slide
The Problem slide, example

In this problem-solving idea for a startup, one of Waveup’s clients – an activewear brand – presented with quantitive proofs. 

The Problem slide
The Problem slide of the circular economy brand, example

The Waveup team has a wealth of success stories, with this circular retailer being one of them. This example showcases the power of highlighting a specific niche in the problem slide and why it’s vital today. 

This example showcases that the problem is global
This example showcases that the problem is global

Build a well-defined go-to-market strategy

Your go-to-market strategy (GTM) is like your pathway to customers, and investors want to check if the route you will be taking is efficient and makes overall sense. It is not just about the marketing channels but also the distributor network, online and offline selling strategy, and an established supply chain. A well-thought-out GTM plan can demonstrate to investors that the startup has a solid plan in place for reaching its target customers and scaling the business.

Example of the go-to-market slide for a fashion brand
Go-to-market slide for a fashion brand, example
Go-to-market plan for a circular retail brand
Go-to-market plan for a circular retail brand, example

Highlight your market position and show what makes your product unique

Just like your customers, investors need to understand what sets you apart from the competition and makes your product unique. This could be anything from a unique technology or design feature to an established community or scalable business model. 

Emphasizing what creates a strong competitive moat around your brand is key in convincing investors that your fashion startup has the potential for long-term success in the industry.

Example of the competition slide for an activewear brand
Competition slide for an activewear brand, example

For instance, Waveup’s clients have demonstrated a clear direction and a strong competitive moat in the activewear space, which can inspire other fashion startups to position themselves similarly. By incorporating unique selling propositions and examples of a strong competitive moat, investors will be more inclined to invest in your business.

Example of the market positioning slide for a fashion brand
Market positioning slide for a fashion brand, example

Showcase your specific niche in the fashion industry

One of the key factors that investors consider when evaluating a fashion brand is the market potential. They want to see that there is a clear demand for the products and that the brand has a specific target audience. This is where having a well-defined niche becomes crucial.

By carving out a specific niche for your fashion brand, you can differentiate yourself from competitors and establish a loyal customer base. This can also help you develop a more focused marketing strategy, leading to more effective advertising and promotion.

Example of the opportunity slide showcasing the specific niche
Opportunity slide showcasing the specific niche, example

Establish a long-term vision

For investors, it’s vital to see that your vision for the company is ambitious and has the potential to grow into a significant market player. They want to invest in businesses that dream big and have a long-term plan and a clear strategy for expansion. 

Make sure to showcase your growth projections and addressable market, demonstrating that your vision is both feasible and compelling. Add your path to 100M customers, including your exit vision — anything that indicates a bold ambition and promises generous returns.

Vision slide
Vision slide, example

In the vision slide of a past Waveup client, a US-based circular economy startup, the focus was on demonstrating a clear direction linked to a specific market size. This slide showcased the company’s ability to solve a real problem in the market while presenting a vision for the future that investors could get behind. By showcasing the potential size of the market and how the company plans to capture it, the vision slide was able to communicate the startup’s potential to investors effectively.

Vision slide
Vision slide, example

Demonstrate traction with the most impressive numbers 

Including traction signals in your pitch deck is vital as it proves to investors that 1. the market is responding to your business idea and 2. you can deliver results. So if you have any early customers, reviews, or first clients, definitely put it front and center in your pitch deck. Investors need to see that your product or service resonates with customers and has the potential for future growth. 

Be sure to place your traction slide at the front of your pitch deck—by doing so, you can capture the investor’s attention and establish credibility from the outset.

Key KPIs to Show on Your Traction Slide

Growth KPIs that matter 

Sales 

​​Sales are the main indicator of growth. Ideally, investors expect to see a promise of 20% MOM growth to consider your business as a good investment. Strong online sales are a big plus, so make sure to include them in your projections and overall GTM strategy. 

The number of customers & orders placed to date 

Showing your orders to date is an effective way to validate consumer demand for your products for investors.

Activewear startup’s traction slide
Activewear startup’s traction slide, example 
Traction slide for an activewear brand
Traction slide for an activewear brand, example
Example of traction slide for a circular economy brand
Traction slide for a circular economy brand, example

Unit economics  

Customer acquisition cost (CAC)

Understanding revenue potential starts with understanding Customer Acquisition Cost (CAC) and Return on Ad Spend (ROAS). CAC is such an important metric for fashion brands because it reveals how many resources are needed to acquire new customers.

Take a look at your CAC compared to the industry average. On average, it costs approximately $129 to acquire a new customer in the fashion industry. If the numbers look good against benchmarks, highlight that to investors and explain the reason for it. For example, Our CAC is below other players because we have a strong organic presence, referrals, etc. 

Conversely, if you see that your customer acquisition costs are considerably above benchmarks, it’s time to revise your marketing strategy, find ways to bring the cost down, and present your solution to investors.

Customer Lifetime Value (LTV)

When it comes to understanding customer relationships, CAC and LTV are like two sides of one coin. CAC helps you zero in on acquiring paying customers, whereas LTV provides insights into how to monetize them better. It is a worthwhile endeavor to combine the metrics and move beyond basic customer acquisition metrics so that you can nurture those relationships more strategically. 

There are various ways to measure LTV, depending on your business model. The simplest formula is to go step by step and determine average purchase value, purchase frequency, and customer lifespan. 

For your business model to be considered effective, your LTV:CAC ratio must be a minimum of 3x, ideally — higher. If that’s the case,  emphasize it in your deck and explain what helped you achieve it, e.g., high referral rate, growing AOV, and so on.

Key customer metrics for fashion marketplace
Key customer metrics for the fashion marketplace
Unit economics slide for a data-driven deck Black beauty
Unit economics slide for a data-driven deck Black beauty 
Unit economics slide highlighting key metrics for fashion startup
Unit economics slide highlighting key metrics for a fashion startup

Retention Is your lifeblood

Keeping your business thriving depends on one thing: customer loyalty. And when it comes to fashion e-commerce, the key is repeat buyers. Surprisingly, only around 10-11% of fashion customers return for more from their favorite stores, regardless of how much they order.

Repeat purchase rate

92% of brands are primarily defining their retention rate as their repeat purchase rate. This figure is highly significant as it can be used to display financial stability and reliability for investors interested in backing a particular brand or company. If you have bad retention, you can show your plans and strategies for improving it, such as implementing loyalty programs, personalized recommendations, and other retention-focused initiatives. Additionally, demonstrating how your customer lifetime value (LTV) is trending upwards can also give investors confidence in the long-term potential of your business.

The number of customer reviews

Yotpo report has revealed that stores with lower order volumes tend to have fewer customer reviews posted to them – suggesting that a low perception of customer engagement is one cause. 

By putting a specific focus on increasing their customer reviews, you can not only improve your online reputation but also pave the way for better marketing efforts and increased conversions. Plus, including customer reviews helps to build excitement and create buzz around your brand.

Example of traction slide with customers review
Traction slide with customers review, example
Example of traction slide with customers review
Traction slide with customers review, example 

3 proven ways to maximize your chances for success

Follow industry trends

Sustainability is a growing trend in the fashion industry, and if a business deals with conscious fashion, it would be beneficial to highlight this aspect in the pitch deck. Investors are more likely to invest in businesses that align with their values and contribute to a sustainable future. It is also important to stay up-to-date with other industry trends and showcase how the business can adapt and stay relevant in the market.

Demonstrate scalability

For an apparel brand, scalability can be a major challenge. That’s why it’s important to demonstrate to investors how your business can grow and expand over time. One way to do this is by showcasing a strong partnership network. By building relationships with suppliers, manufacturers, and distributors, you can create a supply chain that is not only reliable but also flexible enough to accommodate growth. This can be particularly important if you’re planning on expanding into new markets or introducing new product lines. 

Use design to frame your message

A well-designed pitch deck can help to convey your brand image and make a strong impression on investors. It’s important to consider the aesthetics of your pitch deck and ensure that it is visually appealing and modern in design. This can help to showcase your brand identity and differentiate you from other fashion startups. Incorporating elements like your brand colors, typography, and imagery can help to make your pitch deck stand out and leave a lasting impression on potential investors. Additionally, a modern design can convey a sense of innovation and forward-thinking, which is crucial in the competitive world of fashion startups.

6 posts

Maria

Senior Consultant

Hey! I’m Maria, Senior Consultant here at Waveup. I have over 5 years of experience in operating consulting, analytics, and venture capital. I have worked in top-tier consulting companies and have kept learning from domain experts and world-class VC advisors. In my articles, I share what I have learned from my experiences. I hope to provide valuable insights that can help others who are working in or interested in these fields.