When you think about investing in the next big “disruptive, cutting edge startup”, underwear is not the first thing that comes to mind. When I saw MeUndies was raising money via equity crowdfunding my reaction was “huh” (head scratch).
The pitch video was a sexy parade of beautiful models in nice undergarments that was reminiscent of the legendary American Apparel brand.
Well, that was fun to watch, but is this something I want to invest my money in?
I read through the investment profile, which starts with the bold claim to make “The World’s Most Comfortable Underwear”.
Comfortable bloomers are important. Maybe this is a game changer?
In fact, the following week I found myself wondering just how comfortable these panties might be. Isn’t it kind of a personal thing? Can one manufacturer make underwear that is supremely comfortable for all? How big is the underwear market anyway?
10 seconds on Google and I found out Hanesbrand sold about $5 Billion in garments last year, which according to my calculations is a whole lot of money. If MeUndies can capture even a few percent of the Hanes market, this might be a pretty awesome business after all. But how do I know if these undies are all they claim to be?
These guys definitely know more about early stage investing than me. The fact that they have put skin in the MeUndies game makes an impression. Investor Gary Benitt says, “I absolutely love the product – the Tagline is simply TRUE. I’m looking forward to seeing what else the team can crank out.”
One of the investors actually tried the incredible, amazing, world’s most comfortable drawers? Of course, market validation at its very best.
I realize that before I would consider investing in a company like MeUndies, I would have to try them out for myself. Any charismatic entrepreneur with a few beautiful models can wow me with a super-sexy underwear video, but as the startup gurus say, we must “Eat our own dog food” and actually use the products ourselves.
So, equity crowdfunding creates an interesting cross section between investors and consumers. For consumer products and services, every one of us can pretty easily test out and assess them ourselves. If that’s not possible, I would want to hear the opinions of trusted friends and colleagues who can give a good assessment.
As the early venture investment market opens up, consumers will have the opportunity to become Angel investors. Just as savvy consumers aren't fooled by glossy brochures and commercials, savvy consumer investors will also do their due diligence; even if that means taking some new underpants for a test drive.
Should happy consumers trust their instincts to make good investments?