This is the excerpt of a recent commentary from Jiangnan Fenqing, a famous internet commentator and prolific investor in China. He previously commented on why P2P is doomed in China

“I once invested in a company, which got lucky with timing in 2017, and became very profitable. When the luck ran out, it had a few hundred million CNY on its account.

We had a board meeting to discuss what to do next.

My opinion was: we retrench all 1000+ employees, stop the operations, and use a dozen million CNY to compensate the employees. You then pay off the investors. With three co-founders and CNY 500 million + left on the bank account, nobody had any pressure and you can take your time to figure out what to do next. If you can’t find any good new direction, let’s just liquidate the company.

The founders refused – they said they have a dream and have to keep going. So they did. For a year, they took 1000+ employees with them but did not get anywhere with business. By the end of the next year, the surplus cash ran out, and all three co-founders became heavily indebted.

The most tiring thing in investing is to encounter situations like this. Many things have reached an end but the founders who have been driving the business do not see it. And when they do, it is usually too late.

I am usually scared when young people tell me that they create startups not for money but for a dream. Well, at my age, I just want o make some money.

It is easier for everyone.”

Interestingly, we wrote about something similar about a year ago.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].


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Amresh used to cook and run food stalls. Stumbling into the tech industry by accident, he decided to stay for the long run. He joined Momentum Works in 2016 as a Project Manager. He is intrigued by ever changing internet businesses and its impact on day to day life. His interest lies in football, food and cryptocurrencies.