A Fundraising Reply from Three and a Half Years Ago: Test the Market Before Naming a Price

I hear this is a controversy in e-commerce circles. Judging by the email’s date, it was about three and a half years ago. I also received an email discussing fundraising; I have redacted details to protect several people involved. The most obvious factor is the pandemic, which lasted three years. The email was actually sent in September 2019, before the outbreak. Most entrepreneurs did not anticipate a pandemic, much less one lasting so long. It disrupted many original plans. September 2019 was indeed a period of relatively ample market liquidity. Some capital was moving from technology stocks in search of ‘new consumption’ and ‘consumption upgrading.’ Of course, the pandemic described above and the subsequent funding winter followed. Back to fundraising. 1. My immediate reaction was that the asking price was absurdly unrealistic. It left me with no motivation to learn more or continue talking, so I wrote a direct rejection. Fundraising still requires a clear understanding of your stage and the overall market environment. Before naming a price, sound out the market. Do not make sky-high demands from a self-satisfied world of your own. 2. Another reason, which I did not include in my reply, was that I knew very little about intellectual-property-based products and toys and had little interest in them. This relates to the investment professional’s own interests, capabilities, and boundaries of understanding. I also believe it is difficult to earn money beyond what you understand. Without interest or passion, I could not persuade my boss. At the time, there was probably a more mature toy and figurine distribution company whose logo was a lion(?). If investing in that segment, my instinct was that choosing the lion would be much more reasonable. 3. I have written quite a few Facebook posts on fundraising; you can consult those too.