When founder Matthew Scanlan initially financed his cashmere company, Naadam, he used a second mortgage as collateral. It was a $2.5 million loan, very high interest, and he had 12 months to pay it back.
Matthew remembers wiring the money to Mongolia to buy cashmere from herders who lived in remote parts of the country. He withdrew the cash from the bank and filled 32 plastic shopping bags with it. “It filled the entire back seat of a Land Cruiser and we drove 24 hours in the middle of the Gobi Desert and over the course of three weeks, we bought 60 tons of raw cashmere,” Matthew recalls.
That year, Matthew figured out how to process the raw material, get it spun into yarn, and sell both yarn and sweaters. Naadam’s story of cutting out the middlemen from the cashmere supply chain and working directly with Mongolian herders resonated with customers. Supporting the herders and the storytelling around it made it easy for Nadaam to get funding from small venture capital firms and private equity firms to keep the brand growing.
Matthew had to pivot around 2021, however, when raising money for consumer brands through venture capital got much harder due to the rising costs of advertising on big platforms like Google and Meta.
Here’s his outlook on financing consumer brands in 2025.



Lower valuations aren’t necessarily a bad thing
Gone are the days of astronomical valuations for small consumer businesses. A business doing $1 million in revenue will no longer get a valuation of $30 million when looking for investment. But Matthew is optimistic that resetting valuation expectations will be better for businesses and consumers. "Ultimately, I think it will benefit consumers long-term, because better brands are going to get funded and less businesses are going to fight for dollars and eyeballs.”
Explore new financing options
Matthew is particularly enthusiastic about new tools that help balance cash flow for early stage companies. “There are fintech tools that will lend to early stage businesses and extend your cash flow,” he shares, pointing out that the option can be expensive because of high interest rates right now. There are also options like loans against a percentage of your inventory or loans against a company’s accounts receivable. These types of loans cater to emerging consumer brands grappling with unpredictable inventory turnarounds.

Prioritize profitability to unlock capital
Since the changes in privacy laws that upended the online customer acquisition, profitability is the name of the game. Matthew says it took 18 months to change strategy from growth to profitability, but he says it now puts Naadam in a better position to utilize traditional forms of lending and later stage forms of capital.
The emphasis, though, is on having a positive cashflow to be able to afford interest on the debt and to make some headway on repaying the principal. “If you can’t prove that you’re profitable and can consistently stay profitable, you can’t take loans that otherwise will help you grow,” Matthew says.
Telling your story to investors is valuable
Matthew says to be prepared for a lot of rejection as an entrepreneur. He says the process of pitching is valuable, even if it doesn’t end in an investment.
Through pitching Naadam, Matthew says he started to believe in the brand’s story more himself and figure out how he could support Mongolian herders and provide more value to customers. “It was only through engaging with the investment community, getting poked and prodded by investors, that molded and shaped the thesis that has defined our success,” Matthew says.
To learn more about how Naadam is thinking about a sustainable path to success going forward, listen to Matthew’s full interview on Shopify Masters.