Yash Khandelwal is the co-founder and CFO of Hedge, a seed-stage platform allowing users to create hedge funds with their friends. Hedge is backed by Litquidity Ventures, OrangeDAO, Firstminute Capital, Starting Line, and CreatorLed VC, among others. They’ve also established partnerships with NASDAQ, Plaid, and Apex. Yash has previously participated in On Deck and Launch House as a fellow. He graduated from USC in December 2021 with a B.S. in Business Administration.
In today’s issue, Yash shares his personal story of getting into investing, marketing through creators, and gaining partnerships and investors:
💰 What is Hedge? Hedge is a collaborative trading platform where you can make a hedge fund with your friends by pooling money & investing together. Hedge offers both individual & group investing, as well as social features, like investor communities and interactive learning resources to help users make better investment decisions.
💡 How Hedge started: Kyle [Hedge’s co-founder and CEO] and I started trading the day we turned 18, but we weren't super active. I think the problem was our level of affluence. We didn't have the right community with the right people to get us into investing. It wasn't until we joined a group chat with a bunch of friends in college, that we really started to get into investing.
While we were trading, we noticed three key problems: 1) None of our female friends invested, so the stock market isn’t inclusive, 2) Communities want to grow together but can't, and 3) People don’t have communities to get into investing like Kyle and I did. People say investing has been democratized with the advent of Robinhood and Investopedia, but many investment platforms don't consider the growth of their users over time. They just care about volume. Those were our main theses for starting Hedge.
👯 Creating inclusive communities: Creators and influencers are a great way to reach people from different demographics. Last round, we got Litquidity and CreatorLed VC, which have over 250 million followers across their creator-turned-investors. It's a huge distribution network. Our main way to target women and underrepresented communities is through influencers who represent these communities. We also go straight onto college campuses to target the already existing communities.
☀️ Day in the life: I usually get started around 8AM. My day is filled with work and lots of Zoom meetings and then a quick workout at night to end the day.
📈 Story behind Litquidity’s partnership: The guy behind Litquidity posted something saying, “If you have a sassy Social Media Manager, I'll invest $100k right now.” We replied to the tweet and sent him a term sheet with a screenshot of the tweet. It was formatted in a way that gave off very MD investment banking vibes. He absolutely loved it. The team absolutely loved it. Then, we got on a call. He loved the integrations on the creator side and decided to invest.
💸 Other partnerships and investors: Group investing has existed on paper for decades. If you look at wealthy people, many of them pool their money with other people in things like hedge funds. There's no way for retail traders to invest together, but they really should be trading in groups. You bring your own alpha and learning resources. NASDAQ, Plaid, Apex, and these other big partners were super interested in this new type of trading.
I absolutely love our cap table. For our seed round, we were eight times oversubscribed. We were able to be super picky with who we wanted on our cap table.
🇿 Does being younger put you at a disadvantage? I believe being younger is actually a huge advantage because it provides a lot of insight into new opportunities. Being a part of the Gen Z demographic allows us to understand the target market better and build a product that is more suitable for the next generation of investors.
🚀 Launch House: I did Launch House in February in the New York cohort. The best part is being surrounded by founders on different levels. People who’ve sold a company are in the same room as those just starting out. For first-time founders, that environment is super helpful. For instance, we learned how to pitch effectively. A big part of fundraising is storytelling, showing that you're passionate about what you're doing.
✍️ Application tips: Network with people in the Launch House network. Get a good grasp of what the organization is and get to know them better so they can push for you. Show how passionate you are about your startup. Make sure you can tell your story in a powerful and impactful way.
💭 Is being a founder worth it? Being a founder can be very hard and the day-to-day work takes up a lot of mental space. The thought of whether it's worth it has definitely crossed my mind, especially when we first started out and got over a hundred no's. However, I don't regret this decision at all because I'm very passionate about what we're building at Hedge and in the entire investing space. We are on a mission to create a more accessible and inclusive stock market and every day we are getting one step closer to that, which gets me super excited! Moreover, being in the startup ecosystem, I’ve gotten to meet so many cool and interesting people.
🌎 Growing up Asian-American: My parents immigrated to America with almost nothing twenty-four years ago. They left everything back home to make sure my sister and I would have a better life in America. I learned a lot from watching them work hard day and night to make sure we had everything we needed. You're going to work harder than everyone out there because your parents made the sacrifice to come here. You want to take advantage of that opportunity and do something great.My parents absolutely love what I'm doing, though my mom still doesn't fully understand it. She doesn't invest, but she’s an entrepreneur who started her own salon. They're always asking me for updates.📈 Gen Z Trends: Community-oriented growth (i.e. in trading) and creating authentic relationships online
💫 Most underrated advice: Get comfortable taking risks. I think many people get scared of the challenges that come with it, but that's what will take you to the next level. Overcome those challenges because each opportunity will allow you to learn and grow along the way.For me, that was going full-time with the startup and saying no to the full-time investment banking offer I had. As a founder, you’ve got to just jump right in and have faith that it’ll work out.
tl;dr 1) People want to connect with those who come from the same place as them, who look like them, talk like them, and understand their backgrounds & interests, 2) Community-oriented growth is a major trend with Gen Z, 3) Don’t be afraid to fail because you have so many chances while you’re young, and 4) Get comfortable taking risks - it will take you to the next level
Check out Hedge here: hedge.io