Resilience through Finance: Understanding your financial needs is key—whether it's shorter-term financing through loans or longer-term investment from business angels. Smart money matters, as the right investors provide guidance, not just capital. Nonetheless, finding investors requires persistence and research. Ultimately, diversifying your financing sources, combining loans and investment, enables sustainable growth while preserving your mission.
Case study by IDEA Consult*
Founded in 2015 by three friends, The Knotty Ones brings Lithuania’s rich knitting tradition to the forefront of modern fashion while empowering female artisans. The brand challenges exploitative fashion norms by spotlighting makers and creating meaningful work opportunities. To scale its mission, The Knotty Ones sought investment from business angels and an EU-backed loan, balancing purpose-driven growth with financial sustainability. Here is their story:
As The Knotty Ones grew, they remained a seasonal business, with production and sales slowing during the summer off-season. So, when wholesale orders from the US—requiring upfront investment in stock with payments arriving later—started coming in during their off-season in 2022, it created a need to better manage their cash flow. The Knotty Ones needed a solution to bridge these gaps and support the growth of their business-to-business activities.
“Don’t close yourself off and don’t limit yourself – talk to people that have been through this journey, communicate, and ask for help.”In 2022, as their business was growing, B2B opportunities were ushered in during the off-season, and financial support was needed to realize the wholesale orders. For this, The Knotty Ones secured a European Investment Fund-backed loan through Noviti, a non-bank business financier. The loan allowed them to invest in production to build up the stock.
“Don’t close yourself off and don’t limit yourself – talk to people that have been through this journey, communicate, and ask for help.”The EU-guaranteed loan application process was different. For The Knotty Ones, as an SME (Small and medium-sized enterprise), this type of EU-guaranteed loan through Noviti was a favourable instrument, especially in comparison to a loan with traditional banks. Loan recipients are expected to be profit-oriented rather than growth-focused and must prove their profitability. This was not feasible for The Knotty Ones as a start-up. “The loan application process was relatively smooth and straightforward”, says Akvilė, “and it was very important for us to be able to fulfil major B2B orders”. Akvilė notes that such tools are expensive yet very important since SMEs usually do not have the same financing opportunities as bigger companies. Yet, as the co-founder points out, you have to do your research, prepare the right documentation, reports and targets, and be ready to negotiate. 
The EU-guaranteed loan allowed The Knotty Ones to invest in production and build up stock, 92% of which is now sold outside the domestic market, with 60% in the US. Yet, finding the right business angel investors has been even more impactful for the growth of the company. Ieva Zubavičiūtė, a UK-based Lithuanian, was one of the investors guiding and supporting the business before ultimately joining The Knotty Ones as CEO. “Investors are in it for the long run; you invite them to share your company. If you choose the right investors, it enriches your business,” says Meškauskaitė-Dobrajs. Working with investors both locally and abroad has provided The Knotty Ones with diverse insights. Consulting with people who bring different experiences and expertise has enabled the company to think bigger and plan its next steps, such as aiming to replicate its model of employing and empowering local artisans in the US.
„Investors are in it for the long run, you invite them to share your company. If you choose the right investors, it enriches your business.“
Images: Courtesy of The Knotty Ones
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*IDEA Consult is an influential player in the field of policy support advice, underpining the entire policy cycle, from analysis, through policy preparation, to implementation and evaluation. Find out more here
