Etsy, Inc. – Part One: It’s All About the Guanxi

In order to gain a better understanding of’s company policies and decisions, one might take a look at who is behind this company; in other words, follow the money:


Date                     Type            Amt.     Investors                                                                                          Value

06/01/06 Seed 0.315M Caterina FakeStewart ButterfieldJoshua SchachterAlbert Wenger Unknown
11/01/06 Series A 1M Union Square Ventures Unknown
07/01/07 Series B 3.25M Union Square Ventures Unknown
01/01/08 Series C 27M Accel PartnersUnion Square Ventures Unknown
08/01/10 Series D 20M Index Ventures Unknown
05/01/12 Other 40M Index VenturesUnion Square Ventures, Accel PartnersBurda


Chief Executive Officer and Director: Chad Dickerson

Board of Directors:

James W. (Jim) Breyer, Accel Partners (ETA: See this Forbes list)

Caterina Fake, 2bkco, Inc.

Frederick Wilson, Union Square Ventures

Jonathan Klein, Getty Images, Inc.

Christoph Braun, Ph.D.


In Etsy, Inc. – Part One, we will take a look at Accel Partners.

First, who is James W. Breyer?

According to, billionaire Jim Breyer is Co-Founder, President, and Managing Partner of Accel Partners, a venture capital firm with investment teams in the U.S., London, India and China. Accel Partners is the money behind many familiar internet faces. According to Accel’s website, Jim is the Lead (or Co-Lead?) Investor in Etsy.

Jim Breyer is the son of John P. Breyer, Chairman of the Board of Directors of IDG Capital Partners (a part of IDG Ventures),  a venture capital firm based in China. described IDG as “one of the pioneers of investing in the Chinese consumer Internet.”  Jim is also on the Board of IDG Capital.

Accel Partners and IDG Capital are partnered through IDG-Accel, based in China. IDG-Accel Growth Fund, L.P. is part of the IDG-Accel Partnership.  From (emphasis added):

IDG-Accel China Growth Fund specializes in seed and startup investments. The fund does not prefer to invest in late-stage companies. It seeks to invest in information technology, healthcare, consumer technologies, and other emerging technologies. Within the consumer Internet sector, the fund targets companies in the media, social networking, and search and online retail sectors. Within the information technology sector, it seeks to invest in semiconductors, software, and networking. The fund seeks to invest in companies based in China. It seeks to invest between $4 million and $8 million in companies with revenues between $3 million and $5 million and staff in range of 300 and 400. The fund …


A relevant Etsy forum post (emphasis added):

Global Street Handmade:Kellan,Accel Partners is one of the venture capital firms that owns Etsy. Accel Partners is also teamed up with IDG Capital, a firm based in China. IDG-Accel is dedicated to growth for Chinese companies. Could you address how this might effect Etsy decisions about what is allowed to be sold here and what entities are allowed to sell?
That is, there have been many concerns along the lines of 16 different shops offering the same “bubble necklace” for sale. No offense meant to any specific country, but most of those shops are based in China. Etsy does not close down these obvious-to-most reseller shops and indicates most of them have passed muster. Yet Etsy’s own policy is that no resellers are allowed, in direct conflict with what is actually going on.
So, it begs the question, is Etsy, like IDG-Accel, dedicated to growth for Chinese companies at the expense of the small businesses who helped grow this site?

Hi Global,Fascinating question. The short version is, it has no effect whatsoever.We’ve certainly talked to our partners at Accel about our international expansion goals, but to the extent we’ve talked with them about China their focus at the time was on how to sell into the fastest growing online consumer market on the planet, not the other way around.

We’ve never talked to IDG about our policies or strategies.

And none of our policies and strategy around resellers, manufacturing assistance, or seller growth (in the US, China or elsewhere) are shaped by our relationship with Accel.


Thank you Kellan. So, if I’m understanding this correctly, the Board of Directors does not make decisions on Etsy policy? That is left entirely up to Administration?
That (d)oesn’t aswer the question Kellan.
sy2010, you’re right, on my 2nd reading it doesn’t.On my first reading I thought Global was specifically asking about Accel/IDG influencing Etsy strategy, rather then whether Etsy was pursuing a similar strategy.
No, Etsy isn’t following a strategy of supporting Chinese companies over small sellers.

My interpretation is that Kellan  is saying Accel’s focus is on (Etsy) selling into the Chinese market, not vice versa.  Wouldn’t inviting more Chinese companies to sell on Etsy go toward this goal? And wouldn’t allowing Chinese resellers to flourish on the site be “supporting Chinese companies over small sellers?”

So, can Etsy succeed where eBay failed?

From, regarding eBay’s failure in China (emphasis added):

Spend any time in China, and you quickly learn the power of “guanxi,” or social connections. Guanxi drives business deals and government contracts. It’s the invisible glue that ties people together. It’s the sense of connection and mutual obligation that Chinese society prizes in personal relationships…

…The problem was that eBay had no mechanism for simulating guanxi…

…”Those buyers really want to get to know the sellers,” Paul A. Pavlou, a professor at Temple University’s Fox School of Business, told Pacific Standard.

In China, business is not just business. It’s social

Dear readers, this needs no further explanation than “I refer you to Etsy’s New Guidelines.”

In Etsy, Inc. – Part Two, we will delve into Union Square Ventures. (Stay tuned. The plot thickens.)


2 thoughts on “Etsy, Inc. – Part One: It’s All About the Guanxi

  1. Pingback: The New Etsy | Greeting Cards by Twisted Oak Designs

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