Raising for a consumer brand: what investors need to see beyond the Instagram

Consumer brands photograph well and investors know it. A beautiful product, a founder with a story and fifty thousand followers is the easiest pitch to fall for and the hardest to assess — because the question is not whether people like it but whether they buy it again at a price that covers the cost of reaching them. Brands that can show that raise easily. Brands that cannot raise once.

The numbers that matter

Repeat purchase rate and frequency. What share of first-time buyers buy again within 90 days, and how often. A consumable with 40% repeat at 60 days is a business; a product bought once is a marketing campaign.
Contribution margin per order after product cost, packaging, fulfilment, payment fees and returns. Before marketing.
Blended CAC and first-order contribution. If it costs £28 to win a customer whose first order contributes £22, the business only works if they come back. Show when it becomes positive.
Channel mix. Own site, marketplaces, wholesale and retail have wildly different margins and cash profiles. Show each.
Organic share. What proportion of sales come without paid marketing. It is the number that tells an investor whether the brand is real or rented.

The marketing-funded growth trap

Revenue that only exists while the ad spend is on is not growth; it is buying customers at a loss and calling it traction. Investors saw a great deal of this in 2020–22 and now ask, early, what happens to sales if marketing stops for a month. Have the answer, and have it be more than zero.

When crowdfunding beats angels

If your customers love you, a crowdfund turns them into shareholders and marketers at once, and public campaigns suit consumer brands in a way they do not suit B2B. The costs are real — fees of 6–8%, hundreds of shareholders, a public failure if it does not fill — and retail investors are a different regulatory world from Find's certified ones. Many brands do both: a lead and anchor investors from angels and platforms like Find, then a crowdfund to bring the customers in on the same terms.

What to show on the listing

The product, obviously — a cover image of the thing, not a mood board. Then the numbers above in traction. Then the channel plan in use of funds: "£120k to stock for a John Lewis listing secured for March" is a use of funds; "brand awareness" is not. The video should be the founder, not an advert; investors can find the adverts themselves.

Questions founders ask

"We have 80,000 followers. Does that count as traction?"

It counts if it converts. Show the conversion — followers to buyers, and the cost of the followers. Otherwise it is an audience, which is an asset, not a result.

"A retailer wants to list us but the margin is thin."

Show retail as a separate channel with its own margin and cash terms, and explain what it does for the brand and for own-site sales. Investors understand retail as a marketing channel; they worry when it is the only channel.

"SEIS/EIS?"

Most consumer brands qualify as trading companies. Retail and wholesale trades have some exclusions (goods bought in and sold on without change can be "dealing" — ask). Advance assurance settles it.

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