R&D tax relief - Curveblock
Industry: Real estate fintech Number of successful claims through SeedLegals: 2 Time taken to write the R&D claim: 3...
Onloan is the stylish and super-simple new subscription platform for loaning women’s clothes, for work and the weekend, offering access to some of the best contemporary brands, at a fraction of the normal cost. Subscribers are at liberty to try many new styles, without the commitment, the waste, or the cost of purchasing. Select two or more favourite items online, with your shipping, cleaning, and minor mending all included. This is a 21st-century clothing service designed for busy women who love clothes, at a remarkable, affordable fixed cost.
The typical retail value of each item is £250, so it is easy to see why this new leasing model appeals. A subscription starts at £69 per month for 2 pieces, so members find themselves saving money and getting the quality of apparel they really want. It’s now possible to wear premium outfits all year, and never have to buy one. Members borrow 2, 3 or 5 new items to wear for one month, then swap them out for something new when they want to change. For any size changes needed, these are handled quickly at no additional cost.
A number of customers are turning away from fast fashion, reconsidering the high ecological costs, but the primary attraction of Onloan appears to be the fantastic wardrobe variety. The fun of it. The membership business model opens up the opportunity for women to experiment with bold new looks; perhaps upgrading for a new role at work, or for making a statement in social situations. Onloan have customers going on holiday, or a work trip, who upgrade to 5 items for the month, then reduce rentals back again to 2 or 3 items per month, meaning they can travel in style without buying more clothes. For women changing body shape through pregnancy, this an easy way to stay stylish throughout, and has been a popular choice for many. Remarkably, co-founders Tamsin Chislett, and Natalie Hasseck have both gone through pregnancies within the first year of trading.
It’s easy to sense how much fun they are having running the business from their East London studio warehouse. “I have a love of factories and real tangible things… so it is nice to be around the clothes, that are doing all the work for us”, notes Tamsin. Co-founder Natalie leads the creative direction, with a background in fashion and branding, including work with Mario Testino as Senior Art Director. Tamsin’s career background spans senior startup roles, and working with startups on fundraising, and helping Private Equity & VC investors to assess the social and environmental impact of their portfolios.
“Pre-loved clothes are becoming quite normal, and attitudes are changing fast, which is helping us”, explains Tamsin. “This part of the market has grown much faster than regular ‘new’ fashion”, but she believes this kind of circular economy initiative would not have been easy to launch ten years ago. Tamsin’s background in eco-investments has helped the company to reduce its own environmental impact significantly, such as working exclusively with reusable packaging and designing ecological cleaning operations. They handle almost everything in-house
Onloan’s startup story began with the two founders bootstrapping for four months to prove people were interested in the concept, then launching an Angel round, with 20 investors signing Term Sheets created by the founders on SeedLegals. The process took 5 months to complete. “Our biggest investor is actually Tiny VC, who are just fantastic, and very fast – they are run by the two guys who run AngelList for Europe. They know that at this point in the business speed is very important”, which is one of the key advantages of using the SeedLegals platform.Tamsin has considerable experience of the startup fundraising process, from her background at ClearlySo:
“I’ve worked with many lawyers to get deals done, and SeedLegals just made a lot of sense. There’s a lot of things that need to be done, and these are the same for every startup. SeedLegals make it possible to do these things a lot more efficiently and affordably.”
Recalling her experience of investor negotiations, she compares it to past deals with conventional lawyers. “At ClearlySo, I’ve held founders’ hands through Angel rounds a few times, and never had a horribly negative experience working with lawyers, but it just struck me that an awful lot it was repeated for every deal. Legal costs between £5,000 and £10,000 are quite normal, and it always seemed quite expensive for what was actually being done. Lots of documents need to be reproduced but with just a few different terms in them. It’s so painful at this stage to be spending money on something like that. It’s not a good use of your money.”
“I don’t think anyone finds raising money easy. You are always worried about stuff that might rock the boat,” which includes the negotiation process, and occasional tussle over legal fees.
“SeedLegals were really great. The number one thing for me was responsiveness at all hours. I was messaging them through intercom at 10pm, and I’d get a response – which was super helpful. Sometimes it was needed to get back to an Angel quickly, sometimes I was suddenly worried I’d done something wrong. It was really nice to have the reassurance, with someone explaining a term to me, or to check that what I’d negotiated was a reasonable thing to negotiate. You could lose a night’s sleep over that otherwise. Genuinely, there were a couple of times where it helped me to get to sleep. It was magic.”
Doing this on a fixed fee basis, “I was super impressed”. Apart from this, “the platform is super easy. I like having all my documents in one place… knowing that the right people have access to the right documents, and keeping the process really organised, without me having to do very much”. Tamsin describes how a SeedLegals subscription helped them create a sophisticated Founders Agreement, prior to opening their seed round;
“We shared this with investors, so they knew we had had the difficult conversations. It walked us through things that were probably going to come up, and need to be discussed, and made sure we discussed them all.”
The Founders Agreement has more detail than would be in a typical Shareholders agreement. “I really appreciated that”. This gives all stakeholders clarity upfront.
They are very helpful in giving you a sense of where negotiations with investors typically end up, for things like Drag Along and Tag Along rights, which are normal. Detailed explanations on the platform help Founders advocate effectively in negotiations and show users the data to back it up.
“It gives us founders the data to support our point of view, and makes the process quicker. Like where it explains that 80% of seed round startups don’t have an Investor Director”. When you are ready to take on an Investor Director, however, there’s a contract lined up, helping to speed that process along too, without needing to hire a lawyer.
Modern technology is allowing new subscription models like this to flourish – adding more value to customers, for lower cost. Both Onloan and SeedLegals are challenging incumbents with these innovative tech-powered business models, reducing waste, speeding things up, while offering extraordinary service; from real-time intercom responses, to free repairs and returns. There seems to have been a breakthrough in the simplicity of it all, while giving power back to customers. The rules of the game are changing fast.