An Interview with Entrepreneur Divya Narendra

Introduction

Divya Narendra is the CEO and co-founder of SumZero, the world’s largest online community of investment professionals working at hedge funds, mutual funds, and private equity funds. With more than 16K pre-screened professionals collaborating on a fully-transparent platform, SumZero fosters the sharing of thousands of proprietary investment reports every year, and offers several ancillary services in support of that effort. These free services include capital introduction services, buy side career placement services, media placement, and more. SumZero’s membership base is represented by analysts and PMs at nearly all of the world’s largest and most prominent investment funds.

Before founding SumZero, Divya was an Associate at Sowood Capital Management, a $3.5B multi-strat hedge fund located in Boston, MA. At Sowood, Divya analyzed investment opportunities across the capital structure. Prior to this, he was an analyst in the M&A Group at Credit Suisse in NYC. Divyagraduated from Harvard College in 2004 with a degree in Applied Mathematics and earned a JD/MBA from Northwestern University. While a junior in college, Divya co founded HarvardConnection (later renamed ConnectU), a social networking website targeting university students that ultimately led to the creation of Facebook. Divya's contributions to the Facebook story were chronicled in the Hollywood movie, "The Social Network" was released in 2010.

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In an exclusive interview with Devathon, SumZero Co-Founder and CEO Divya Narendra traces his journey so far and his plans for the years ahead.

When did you first discover your entrepreneurial spirit and How is your entrepreneurial career developing so far?

It's funny - I come from a family of doctors, so entrepreneurship was a curveball for both them and myself! In college, I didn't know enough about the financial markets to be truly passionate about them and consulting seemed more like a stepping stone than a career destination in itself. So I started exploring alternatives and entrepreneurship seemed not only exciting, but a unique way to tap into my broader skill set. Launching a business requires you to wear multiple hats, to think strategically but also to execute new ideas. I still remember the excitement when I first came up with the concept for Harvard Connection.

What has been the biggest success and biggest failure stories you went through?

I don't think about my career as a series of successes and failures. Overall, I would say I've been very fortunate to work on innovative projects with great people. Sometimes I try things that don't work out, but I generally have multiple "experiments" running simultaneously so that I can gain feedback quickly and isolate the best opportunities to double down on.

How did you come up with the idea for Sumzero and how did it all start?

I used to work at a hedge fund in Boston, during which time I realized there was no platform to connect professional investors working at funds. Traditional Wall Street research has always been riddled with conflicts of interest. Buy Side analysts had always been connecting with each other over the phone or in person. Connecting the buy side analyst community online just made a lot of sense by enabling them to exchange ideas much more efficiently and further limit their reliance on Wall Street research.

Tell us something about Sumzero

SumZero operates on a simple, reciprocity based system. By submitting investment content, an analyst or portfolio manager gains access to the submissions of the entire community. SumZero's principal feature is its Idea Database, which it believes to be the largest non-proprietary database of buy side investment content in the world consisting of thousands of detailed, fundamentals-based investment write-ups with an average length of over 2,400 words. Members that work for funds that prohibit posting or those who simply do not write research of the quality/type available on the site may pay for a read-only license. SumZero's current paying client base includes hundreds of the world's largest and most respected funds, family offices, and endowments.

What are your growth plans for the near future?

We are making significant investments in two areas: Capital introduction services (to help fund managers fund-raise) and in our Data Feed. Cap intro is an extremely important engagement driver on SumZero. By allowing fund managers to create detailed profiles for their funds, potential capital allocators (typically university endowments, foundations, family offices, or fund of funds) have the opportunity to learn about and connect with funds they would not otherwise have heard about. SumZero now has ~700 capital allocators looking to find up-and-coming investment talent and have collectively invested over $400MM into managers listed on the SumZero Cap Intro platform. In essence. the presence of these capital allocators on SumZero compels managers to submit high quality research to the platform.

Separately, we are investing in our Data Feed product to attract more quantitatively driven analysts. These analysts don't individually read investment memos but have the opportunity to use SumZero research as an input into their own models which can output trading decisions for them.

Looking back, what did you learn and what would you have done differently?

I would have learned how to code at a younger age.

In your opinion, what are the hurdles that keep people away from starting an entrepreneurial career? What advice would you give to the new entrepreneurs?

There are so many hurdles but a few that come to mind immediately are: lack of focus, conviction, capital, and assembling the right founding team. Not everyone is suited for entrepreneurship and many folks are much better off in a far more structured environment that a large, established company can provide. To new entrepreneurs, I would suggest staying physically fit. It's a stressful job, but staying in great physical shape can really help maintain mental acuity and a normal sleep schedule which is critical for obvious reasons.

Are you an entrepreneur looking for your MVP built? Get in touch with us at hello@devathon.com

Devathon has built software for companies backed by the world's leading investors like Betaworks, Greylock, Andreessen Horowitz, Accel, KPCB, Lightspeed and many more.