Taking a stake: investing in a client’s business
Tired of the traditional design consulting model? BuroCreative’s co-founder and creative director Roly Grant, talks about the opportunities and challenges of taking an equity stake in Yawn, their client’s business.
Q. Tell us about BuroCreative and Yawn's relationship?
Alice Whiteley of Yawn, is a long-term client. Whilst juggling her busy consultancy and raising three children, she’d been looking for some feel-good nightwear to help her relax. Noticing that department stores typically sold either slinky stuff or basics, she decided to create a brand full of comfort and character. After two meetings where we shared research, we agreed it was interesting.
Q. BuroCreative has an equity stake in Yawn. How did it come about?
Yawn sometimes feels like a very old-fashioned business: it makes lots of things and then tries to sell them. Unless you have a resource to reduce the upfront cost of production and distribution, starting a clothing brand is financially challenging. Rather than burden the business with additional branding and marketing costs from the outset, we could all see that partnership was an opportunity to speed things up through a different way of working.
Q. What excited you about the opportunity and gave you confidence to go for it?
Lots of reasons. Purely as a project, the nightwear market is huge and growing, so the idea felt sound. Whilst we’d never designed for fashion before, we have strong in-house illustration skills, so the print aspect was something we felt excited to try. We knew Alice well and trusted her. And we wanted to explore other ways for a design business to grow, putting our money where our mouth is and creating our own retail brand.
Q. Did you have any initial concerns?
We were clear on the risk and agreed on budgets. Our only concern was how strictly to define scope of work. Rather than nitpick or constantly review, we agreed on a larger stake in return for flexibility. We’ve made a commitment to Yawn – it’s our brand, so we’re there whenever it needs us.
Q. What have been the benefits to your business and to Yawn’s?
This is only our third year of trading, so direct financial reward is a long way off! However, from our side, there have been two clear benefits. Firstly, by working on our own brand and sales assets, our team have become more aware of design as a commercial tool. Secondly, our fee-paying clients are interested and impressed. They like that we believe in and what we do.
For Yawn, the biggest benefit has been a high quality brand from day one. This has set us apart from other startups, securing international stockists, strong e-commerce and interesting brand partnerships. Also, life can be lonely as a startup. By moving into our studio (last year), Yawn feels part of a bigger team. We get things done quickly and it’s fun to be surrounded by different disciplines.
Q. Would you recommend this model to other agencies and if so, what advice would you give?
A heavily qualified yes. Generally, all advice comes back to treating your investment via design in the same way you would cash.
- Trust who you’re investing in. Understand and approve business plans.
- Be clear how your work will give the business an advantage. Without this, you’re just an angel investor (look at the stats for success rates).
- It’s likely to be a long game. Don’t factor returns from this when planning your core business.
Image credits: © Sam Robinson