AAIA Youth was honored to host a VC talk on June 15th, 2022, at 9:00PM EDT, featuring Lu Zhang, who is the Founder and Managing Partner of her venture capital firm based in Silicon Valley – Fusion Fund.
Guest Speaker Information
Lu is in a World Economic Forum – Young Global Leader (Class of 2018). She has also garnered other accolades including the Featured Honoree in VC of Forbes 30 Under 30 (2017), Silicon Valley Women of Influence (2018), etc. The speaker shared current trends of technology innovation in Silicon Valley, opportunities and challenges in the capital market, as well as an outlook to technology innovation in deep tech and healthcare industries from her point view as both a successful entrepreneur and an investor.
New Features of Silicon Valley Development
- Dense innovation ecosystem
Palo Alto, the central city of Silicon Valley, gathers talents, top-class colleges and cutting-edge companies, enterprises and technologies. A long-established and powerful innovation ecosystem with Stanford University as the core has been formed here. Here, the population base of more than 100,000 people brings together more than 50% of the VC capital in the United States.
- Venture capital in Silicon Valley
Small but complete. Silicon Valley occupies a very important proportion and huge capital in the global venture capital market. At the same time, Silicon Valley plays an accelerated and catalytic role in the world’s venture capital.
The New American Dream - From Discovery to Achievement
- From Research Institute to Entrepreneur
As a girl from Inner Mongolia, Zhang Lu came to the United States to study and research in 2010, during which she studied at Stanford University’s School of Materials and Engineering. Zhang Lu mentioned that during her graduate study, she continued to explore. In addition to actively publishing articles, Stanford focused on cultivating “pi”-type talents – the vertical line represents the depth of scientific research; the horizontal line represents the breadth of thinking, and the stroke, which represents the cooperation and integration of industry-university-research and industry. This theory gave Zhang Lu a new understanding of exploring deeper scientific research techniques. It is precisely because of this that Zhang Lu has transformed from a graduate student to an entrepreneur. She founded a medical device company for people with early-stage type 2 diabetes and became a 21-year-old CEO for the first time.
2. Entrepreneur to Investor
After the start-up company was acquired at a high price by the largest medical device company in the United States, Zhang Lu started personal investment. Later, Zhang Lu established Fusion Fund and became a professional investor to support different project innovations. She targets entrepreneurs with medical backgrounds and entrepreneurs with immigrant backgrounds, providing early-stage funding and resources for entrepreneurs with these backgrounds. As one of the few investors with a successful entrepreneurial background and a technical background, Zhang Lu’s advantages in the Silicon Valley venture capital circle have gradually demonstrated that the scale of the company is getting bigger and bigger, and the investment amount is increasing, which has exceeded 300 million US dollars. Last year, the companies she personally invested in achieved four IPOs, and the fund is also expected to have three IPOs this year in the next 12 months.
Current situation and prospects of the big data industry
- Data processing
Data processing is the starting point of digital life. Zhang Lu mentioned a common data platform in today’s life, a zero-code artificial intelligence platform, where users can achieve efficiency improvements without any artificial intelligence background. At the same time, the guest mentioned a digital cutting-edge technology, which is also a typical example of life – artificial skin.
- Data collection, transfer and protection
Since the world is in constant motion, we are also constantly generating data, therefore, the generated data needs to be collected, transmitted, and protected at the same time. Data transfer also needs to be continually simplified.
- Afterwards, the guests made an analysis and forecast on the current mainstream technologies around the medical and health industry. Rapid advances in technology enable more accurate diagnosis and treatment
a. Digitization of the medical field: enabling early diagnosis and prevention
b. Nanorobots: Capsule Robots – Non-destructive Surgery
c. Brain-Computer Interfaces: Exploring the Future of Super Brains
- As a researcher, what is the most important factor in starting a business?
A: The main thing is the integration and transformation of thinking concepts. What the industry needs now is better, faster and cheaper technology. But one of the most important and the hardest to achieve is “cheaper”. This requires the cost of the technology itself to be low enough, and the cost of the application technology to be low enough.
- What is the most successful investment to date? What are the most important aspects of evaluating start-ups?
A: Among them, four companies started the IPO. The fund currently has more than 10 unicorns.
The guests mentioned the following considerations when investing:
1) Market risk, market size, and market timing
2) At the same time, the guests once again emphasized the three elements of technological innovation: better, faster and cheaper
3) Team Risk: Team dynamics, experience, whether the team has unique insights into the industry and the founder’s leadership – this is why many talents are willing to give up high-paying big factories to follow a brand new team
4) Operational risk: supply chain, the achievement of strategic partners
5) Exit risk: company exit range
6) Financial and legal investigations
- The most Asian (minority) women who have been treated unfairly, discriminated against, or challenged? How do women leaders face these difficulties?
A: “I may have experienced more discrimination than others.” As an Asian woman, in Silicon Valley, Zhang Lu strives to do what others find difficult to achieve, and strives to establish a self-confident image in the eyes of others. Facing the prejudice and unfair treatment of others, the guests were able to respond positively and face the challenges head-on. Actively explore various fields, actively pursue, participate in different opportunities, and promote the capabilities of Chinese women and what they can achieve.
- How to reassess the current state of the US start-up market?
A: Zhang Lu mentioned that the current valuations of mid-to-late companies are being adjusted. It’s a good thing for private companies in the long run. She also mentioned that the company’s main reference index is its revenue. However, only science and technology can create broader market value.
- How are US capital markets doing recently?
A: Despite the turmoil in the world, capital from the world continues to flow into the United States. Despite the existence of economic risks, the United States still has strong vigor to adapt and recover from it.
- As an investor, what are the valuable gains and suggestions?
A: Frequent introspection and self-adjustment; Think with a long-term perspective and prioritize long-term value in any decision.
The audience of this forum gained a lot. We not only learned about the current trends and trends in Silicon Valley technology, especially the development of medical and health technology, but also felt the “Silicon Valley Dream” that our guests have explored and achieved.