Awaken* newsletter

May 25, 2024

SHARE:

Anna Fang is the CEO of ZhenFund, an early-stage venture fund that has invested in over 600 startup companies, particularly in e-commerce and AI, with successful investments in unicorns like RED (XiaoHongShu), Perfect Diary, and Horizon Robotics. Anna began her career in investment banking at JPMorgan in New York City and later helped expand M&A efforts at GE China before joining ZhenFund in 2011.

In a recent interview with AHN Ventures, Anna shared insights about her venture capital journey, the high standards ZhenFund maintains for selecting founders, and the evolving landscape of early-stage investments. Read through to learn more:

HanYue: What inspired you to start Zhen Fund?

Anna: I began building Zhen Fund in 2011 after a significant tenure at GE. The catalyst was a conversation with a Graduate School of Business friend who was with Sequoia China about initiating a Y Combinator-like model in China. During this period, I met Mr. Xiaoping Xu, whose vision was truly inspiring. Additionally, the vast opportunities in China’s entrepreneurial landscape were too compelling to ignore.

HanYue: You are one of the pioneers in China’s venture capital industry. How has being an investor changed over the years?

Anna: Ten years ago, being a VC wasn’t as glamorous as being a private equity or angel investor. The scene was quieter. Entrepreneurship wasn’t as trendy, so it was easier to find thoughtful, high-caliber founders. Our first fund was $15 million, and we made 16 investments, including Xiao Hong Shu, which topped lifestyle app charts, and Huobi, HTX, which became China’s largest crypto exchange, and Deeplint, which went public. The VC scene entered a hype cycle from 2014 to 2020, with an overwhelming amount of money chasing deals. It felt wasteful to me. Now, with a ‘VC winter,’ I appreciate the slower pace that allows for more selective investments.

HanYue: Can you discuss the high standards Zhen Fund maintains when selecting founders?

Anna: There’s a high bar, especially for AI nowadays. Founders must deeply understand the technology. For example, we invested in Zhilin Yang, a renowned and famous PhD.  Zhilin Yang is the founder of Moonshot AI, with a ChatGPT-like product Kimmy Chat.When I was looking for interns, there are kids these days who would say ‘whoa, you invested in Dr. Yang? That’s so cool. I want to work for you.’ Interns want to work for us because we invested in Yang, that was really something special.

HanYue: Yodu achieved many significant successes with your first fund. What excites you currently?

Anna: Lately, I’m fascinated by AGI and the global integration of foundational models into robotics. There’s also a burgeoning interest in applications built on these models, alongside video and productivity apps like monaco.im and max.me. Observing how human and AI co-pilots can coexist and interact is particularly intriguing.

HanYue: You’ve invested in many successful founders. What traits do they share?

Anna: It all boils down to hustle – your organization’s name Asian Hustle Network really speaks volume by the way. Successful founders are not afraid to get out there and continue to network. They have an infectious enthusiasm. Even I had to do it once. When I was just getting started, I would put ‘send me deals’ directly in my email signature.

HanYue: What challenges do early-stage startups typically face, and what advice do you have for navigating these challenges?

Anna: All successful companies have experienced moments where they almost didn’t survive, be it due to regulatory issues, cash flow problems, or founder conflicts. My advice is not to be phased by difficulties. Believe that you will pull through. Having mentorship is also crucial as it provides support and helps solve problems together.

One thing I really love about angel investing is the thrill of being the first to adopt new and innovative ideas, always staying alert and aware of emerging trends. Emma and I often joke about not being the top students at Stanford, always admiring how incredibly smart our classmates are. 

Bob taught me the essentials: reviewing the team page – I often feel like an admissions officer searching for predictors of future success. It’s like trying to find Yao Ming among a crowd of tall people—a search for standout talent in a field of strong contenders. 

With everything changing so fast, I am more excited about looking for really thoughtful founders. For example, I am really excited about this one young man, who used to my intern, he could just sit there and talk about the macroeconomy trends forever. And the way he thinks about what might become popular among young people continues to impress me. For example: The younger generation embraces ‘YOLO’—living in the present. And as a founder, you will need to think about new hobbies and cultural shifts that might emerge, and find ways to take advantage of that. 

HanYue: As a lecturer at GSB and a seasoned investor, how do you differentiate in a crowded VC landscape?

Anna: Our differentiation lies in our founder-first approach and our simplified, transparent investment process. Even when we pass on an investment, we provide thoughtful feedback. Zhen Fund is not just about funding; it’s about fostering a community and offering programs like the EIR and Ostrich Club that systematically identify and support potential top founders. We want to build a supportive community. 

Edwin: What trends from China do you see influencing the US, and vice versa?

Anna: E-commerce platforms like Shein and Temu are leading trends, with TikTok’s integration of e-commerce being particularly noteworthy. We’re also seeing interest in replicating China’s online education model and infrastructure globally. Additionally, attempts to mimic the success of businesses like Luckin Coffee in various international markets highlight the growing influence of Chinese business models abroad.

Related Articles

Image Source: Brían Nguyen Instagram

Uncategorized

Vietnamese-American Transgender Model Made History Winning local ‘Miss America’ Pageant

In the 100-year history of Miss America, 19-year-old Brían Nguyen has become the first transgender contestant to win a local Miss America Organization beauty pageant, Miss Greater Derry 2023.

The teenager from New Hampshire won a crown, title, and scholarship. She ecstatically wrote on her Instagram, “No words can describe the feeling of having the opportunity to serve my community and represent my community for the very first time at Miss New Hampshire.” 

Nguyen continued, “I am so honored to be crowned your new Miss Greater Derry 2023, and I am thrilled to show you all what I have up my sleeves. This will be an amazing year.”

Founded in 1986, the Miss Greater Derry Scholarship Program awards scholarships to young women in the Greater Derry area for academic skills, talent, character, community service, and poise.

The Miss Greater Derry Scholarship Pageant is also a preliminary event for the Miss New Hampshire Pageant and, ultimately, the Miss America Pageant.

As the new Miss Greater Derry, she recently attended the annual Best Buddies Champion Gala to support those with intellectual and developmental disabilities. $150,000 was raised over that night to help out their champion nominees. She will be working with Best Buddies New Hampshire throughout her reign.

Image Source: Carla Tramullas / MycoWorks

Uncategorized

MycoWorks’ Sustainable Mushroom Leather Raised Over $187M From General Motors and Hollywood A-Listers

“Growing the future has only just started. This industry will continue to surprise people,” says Philip Ross, co-founder of MycoWorks, a mycelium material founder and producer.

As the innovator of high-quality mushroom “leather” for the luxurious Hermes bags, the business acquired $187 million from Natalie Portman, John Legend, and General Motors and will soon cover the latter’s electric car interiors.

Ross unintentionally discovered leather-like material in reishi mushrooms, a fungus he farmed for his cancer and AIDS more than four decades ago. He then became a mycelium artist and featured his fungus-based works at famous museums.

According to Sophia Wang, co-founder of MycoWorks whom Phil met six years before they founded the firm while working together on art ventures, Ross’s discovery marked the “leather’s” birth to the globe.

Wang and Ross continued to discover more about mycelium and later realized that the material is enticing to buyers who don’t like synthesized contaminants and materials which are produced from animals.

Alongside raising their funding source, the company also conducted a groundbreaking at South Carolina Factory with the aim of attaining a sufficient supply of their fancy product.

With about 200 employees, Matt Scullin, the company’s CEO, said that the “Brands are making very significant changes to address what is really a growing demographic of people who want to buy sustainable products that have provenance and traceability and a lower carbon footprint, lower water use—and mycelium does all of those things.”

Compared to animal leather, the mushroom leather-like material is far more environmentally friendly as the former adds up to about a million tons of carbon dioxide which is tantamount to 30 million cars’ yearly emissions.

Despite environmental and animal issues, people prefer biomaterials or “next-gen” materials over the past decade making it in-demand as multi-billion dollars are invested in the industry.

Nonetheless, Hermes’ firm in France is soon to release its $4,200-worth “Victoria” bag made from MycoWorks’ amber-hued exquisite mycelium.

Image Source: Ricci Chocolates & Michiko Liquete Facebook

Uncategorized

Mom Without Prior Baking Experience But Through Perseverance Finds Success With Homemade Chocolates

Despite having zero experience in baking, this mom entrepreneur was able to give birth to Ricci Chocolates, now branded as the “Home of the Best Tasting Truffles in Baguio City, Philippines” 

Mitchiko Liquete clarified that she is a dessert lover but never a chocolate fanatic. Initially having no interest in making desserts nor in cooking, she capitalized on believing in herself with the vision of making her products look off-the-peg.

To better her craft, Mitchicko heeded the DTI’s Kapatid Mentor ME (KMME) free online training program in September 2022 to learn about branding and marketing while in a ‘hit and miss’ process in chocolate-making, which she considered as a great help for business-starters like her. 

Mitchiko’s 100% homemade premium chocolates got 20 to 30 boxes of sales per day that eventually reached over and above 2,000 to 3,000 packs weekly and enabled the company to supply more than 100 resellers and distributors nationwide.

The success of Mitchicko’s purely hand-crafted, first-class, and domestically produced chocolates paved the way for opening four stores and actualized $17,000 income in one year alone making Mitchiko more than proud.

She plans to expand her sweet business by making Ricci Chocolates visible in every mall in the Philippines.

Image Source: Plant Habitat Facebook

Uncategorized

This Filipino Millennial Started With $20 To Pursue Hydroponics Farming Business

Nothing is impossible for this 21-year-old Filipino who engaged in modern farming with only $20 as a starting capital.

Despite being dissuaded by his grandfather who wanted him to become an engineer, Harold Zapata was determined to uplift farming, recognize farmers, and attest that farmers are the providers of our staple food and without them, it would be challenging for us to live.

As a farmer, his grandfather believed that farming is tantamount to poverty which made him influence his grandson to pursue a different profession.

However, the farmer’s blood runs in Harold’s veins, with Harold’s minimal capital and resourcefulness, he initially started hydroponics farming using used styrofoams which he asked from vendors in their local market.

Unlike traditional farming, hydroponics farming is cheaper as it is a type of farming where plants are grown in water and not in soil and a farmer would spend money only on styro cups, coco peat, feeds, and nutrients.

As a beginner, he only had a miniature greenhouse that could hold 80 pieces of lettuce and made him earn as much as $300 a month, which gradually allowed him to expand his business.

Harold’s hobby-turned-business serves him as a source of income not only from the harvests but from offering for-sale seedlings, building greenhouses, and providing consultations with his customers.

He also exclaimed that pursuing one’s interest unlocks many possibilities and that farming also teaches life lessons.