3 Lessons from Divya Narendra, CEO & Founder of SumZero

Recently, Divya Narendra, the CEO & Founder of SumZero, came on Demo Day, where he shared some key insights around entrepreneurship and investing.

SumZero was founded in 2008 by friends from Harvard College, and is currently the largest online community for professional investors, including hedge fund, mutual fund, and private equity analysts. Members routinely share actionable investment ideas in exchange for access to the ideas of other members.

In addition to offering members access to high quality research, the website enables members to message one another, rate each other’s ideas, create profiles, and even apply for buyside jobs. Thus, in addition to sharing investment information, analysts are provided a platform through which they can build their professional networks.

Our team at CoEfficient Labs was so excited to have Divya on the show and below I share my takeaways from the interview.

Entrepreneurship is the Most Fun Career

Like Divya mentioned in the interview, entrepreneurship, if you can do well at it, is the most fun career, but not why you’d think.

While many people assume the impetus for entrepreneurship is money, Divya argues it’s actually impact. Sure, we see the billion dollar valuations, big mansions, and fancy cars, but that’s not actually why entrepreneurs start their companies.

Especially in tech, there has to be some narrative that starts with a large addressable market with a problem that is big enough to support a viable business. This narrative means that there’s an opportunity to create a massive impact from the get-go and that, more than money, is not only rewarding, but fun.

Being in the University Bubble

When you’re in school, you’re in a bubble, sheltered from real life.

While Divya was building a social network at Harvard, reality set in on what the business world was actually like.

Divya and his co-founders ended up getting screwed over by someone you might know, who ended up starting a competing social network — The Facebook. Yes, that one.

Divya mentions how surreal it was at the time, going through such a life-changing experience at only 20 years of age, in the bubble of a university setting.

My takeaway — treat every setting like it’s the real world.

When Going to a VC

When you go to pitch a VC, the pitch goes well, and the VC likes what they see, the next phase of the process is just as important.

During this next phase, a number of issues will arise, including the percent stake of your company you’ll be selling to the VC as well as the terms of a deal.

During our interview with Divya, he mentioned the need for founders to understand what the typical structure of a deal at their fundraising round is as well as the typical asks from a VC during that round.

Without this knowledge, you don’t know if one VC is more or less greedy than another VC and it’ll be difficult to make an informed decision.

Understanding the market expectations for any given transaction is so crucial to be able to form the right agreements over and over again.

Want to Learn More?

You can watch Divya’s full video interview on our Demo Day website, or listen to his full episode on Apple Podcasts and Spotify.

Tune in next week as I share more learnings from Demo Day. Sending love from the entire CoEfficient Labs Team!

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