Yan Zhao expected she’d have a career in medicine like both of her parents. But along the way, she discovered her real passion was for business and entrepreneurship.
Yan Zhao was recently on the DealMakers Show to talk about her entrepreneurial journey. Yan talks about how she went from an immigrant kid in Texas to a pre-med student at Harvard to becoming a successful entrepreneur.
Listen to the full podcast episode and review the transcript here.
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Yan Zhao was born in China. When Yan was five, her dad immigrated to the U.S. to pursue his research in Texas. Two years later, Yan and her mom joined her father in the U.S.
As a seven-year-old who didn’t speak English, she was forced to quickly adapt to a foreign culture. That included adjusting to a way of thinking about education and achievement that differed from the Chinese culture she was raised in.
Whatever hurdles she faced, she had a chip on her shoulder to perform well. Coming from a family of doctors, she was groomed from a very early age to follow in their footsteps. But as she grew older, Yan noticed that her friends were pursuing their own passions.
Her outstanding grades led her to Harvard where she initially enrolled as a pre-med student. At this point, she felt she was underachieving in comparison to her peers who were developing skills outside the classroom. She was still ready to take on a career in medicine but studying chemistry and an aversion to the sight of blood made her rethink her future trajectory.
Opportunity struck when Yan saw that her classmates were going to campus recruitment events held by consulting and banking firms. She bought herself an outfit and attended an event, setting a new course in finance.
She was offered an opportunity at Morgan Stanley as a trader where she met Robby Gutmann and continued to work at the firm during the financial crisis. But after a couple of years, Yan began to question why she was working in banking.
She discovered that her true passion was to build something meaningful and lasting. That epiphany led her to going to business school then to a career in consulting where she could learn the basics about business.
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About a year after she graduated from business school, Robby offered Yan a chance to meet with Ross Stevens. Robby and Ross were in the process of creating Stone Ridge, a financial company with the mission of “financial security for all.”
The company was built on the values of focus, be humble, and be kind. Yan quit her job and moved to New York to co-found the company with Ross and Robby.
She found that the experience was both stressful and fun. In those early days, Yan learned what it was like to build a business from scratch. In addition to her regular responsibilities, she set up computers, bought printers, designed the website and distributed business cards.
The new company set ambitious goals. The plan was to launch its first fund within five months and then a second fund two months after that. With a lot of hard work, Stone Ridge launched its first fund on schedule.
That initial offering was a reinsurance fund that allowed investors to buy the first index fund of catastrophe bonds. The fund made the reinsurance asset class accessible for the first time to ordinary people.
Stone Ridge has grown into a holding company with multiple financial services and technology businesses under its umbrella. The first operating business was an asset manager that had the mission of indexing assets that had never been indexed before.
By making it easier to invest in alternative asset classes, Stone Ridge could help its clients build resilient financial portfolios through the power of diversification.
NYDIG was launched in 2017 to serve institutional clients who wanted to invest in bitcoin. As a new asset class, the financial infrastructure didn’t yet exist to facilitate large-scale investments. NYDIG was created to solve this problem and serve as a trusted partner to institutions ranging from endowments to insurance companies.
At the time, bitcoin prices were soaring and it was entering mainstream consciousness. But a subsequent crash in 2018 would continue to fuel doubts about whether bitcoin was here to stay. The crash presented a real challenge to the young NYDIG business.
However, the company had the dry powder to keep building through the “crypto winter” until 2020, when the value of bitcoin soared again. Investments in bitcoin from Tesla, MassMutual, and others helped bring more attention to the asset.
Subsequently, many other investors worked with NYDIG to access bitcoin, including the Houston Firefighters Pension Fund. NYDIG has publicly announced $400mm of fundraising and now has over 250 employees, with the most growth occurring during the pandemic.
Storytelling is everything which is something that Yan Zhao was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted.
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Listen in to the full podcast episode to find out more, including:
- How to transition from one culture to another
- Learning to follow passions
- How to take on new challenges when you have little knowledge of a subject
- Yan Zhao’s book recommendations