A major problem in the fashion industry is that it is very difficult for a new designer to “break the code” that enables a distribution capability, so as a result we have few brands dominating the retail landscape and a couture business that while garnering headlines actually generates very little in the way of actual revenue.
Fashion Stake looks to change that by operating a marketplace where consumers can make a financial investment in designers but instead of equity or cash flow in return they get credits that are used for future purchases.
The site, led by Harvard Business School alumnus Daniel Gulati, will put designers and companies together with consumers on two levels, financially and critically. Financially, an investment in a designer will return the ability to apply credits toward purchasing that designer’s garments.
[From: Fashion Stake Crowdsources Haute Couture]
I’m all for alternative investment markets, believing that opening up these opportunities is a democratizing pursuit and the potential for investment returns, however slim the chances are, is better than the current scheme most people apply where their money is essentially eaten alive by inflation. However, my first thought upon reading about Fashion Stake was that it can’t possibly be legal… it doesn’t matter what you call the quid-pro-quo for an investment, whether equity or credits it is still an investment regulated by securities acts and the SEC (I wrote about this last week).
In the same vein:
About Jeff Nolan
My name is Jeff Nolan and I write Venture Chronicles. What started, in 2002, as a simple initiative to understand this thing called “blogs” that I kept hearing about has evolved into something much more significant.
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About Venture Chronicles
About Venture Chronicles
My name is Jeff Nolan and I write Venture Chronicles. What started, in 2002, as a simple initiative to understand this thing called “blogs” that I kept hearing about has evolved into something much more significant.
Along the way to becoming a bona fide blogger I started to understand the implications of user generated content. At the time I was a venture capitalist for SAP, the enterprise software company, and in my travels in the enterprise software market it became evident that blogging would be a powerful communication channel for enterprises to use, what we now call social media, and a powerful information collection mechanism for bottom up corporate intelligence. Combined with search technology, social networking software, and wikis, I was witnessing the inception of an entirely new generation of knowledge management software.
I am currently the VP Product Marketing for Get Satisfaction, the simple and effective way to build online communities that enable productive conversations between companies and their customers. Over 50,000 companies use Get Satisfaction to create a social support experience, build better products, realize SEO benefits, and take advantage of brand loyalty behaviors that results in strong word of mouth marketing experiences in the market.
I can be reached at jnolan-at-gmail-dot-com.
A major problem in the fashion industry is that it is very difficult for a new designer to “break the code” that enables a distribution capability, so as a result we have few brands dominating the retail landscape and a couture business that while garnering headlines actually generates very little in the way of actual revenue.
