Initially MADE.COM survived through a combination of the founders injecting their own funds (Li already set up and sold off one other startup called MyFab) and organic sales growth.
After two years the team decided to seek external funding, partly to help pay for the costly and extensive marketing needed to successfully expand abroad. They got £2.5 million in initial seed funding, Li says.
Then, in 2012 they raised £6 million in a Series B funding round from a combination of three sources: Level Equity, Maximus and PROfounders Capital, a venture capital firm whichMADE.COM cofounder Brent Hoberman also chaired.
The next and latest funding round in July 2015 raised £38 million to help accelerate European growth. It was led by Paris-based VC fund Partech Ventures with Fidelity Investments and Level Equity also participating.
Li is particularly positive about Partech. He says partner Bruno Crémel brought "not just money to the table, but invaluable retail expertise."
"Plus we got on along well with them and that's important. It's like a marriage. You want to be able to spend time together and they need to be able to challenge decisions respectfully. They were real pros," he adds.
The main purpose for raising these funds was to try to build a consumer brand, according to Li.
"It's quite hard to launch a consumer brand without investing significant sums into marketing. It was quite obvious when we did a business plan that we needed funding for that," he explains.
However just because a startup needs cash does not mean they should negotiate away all their bargaining power: you should choose the investor as much as they choose you, Li advises.
"You have to choose a partner you are aligned with. A lot comes down to whether you think they will be on the same page, have a long-term view and an understanding of the business, rather than just an opportunistic investor looking to make a quick buck," he says.
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