Dialogue with Zhu Junwei: Why an International Investment Banker Transitioned to Web3 and Chose to Establish a Solana Treasury Company

Interview: Tong, PANews

Editor: Yuliya, PANews

From Wall Street investment banking elite to a steadfast player in Web3, Joseph Chee, the founding partner of Summer Capital, has completed a cross-cycle career transition with over 20 years of experience in capital markets. This issue of PANews focuses on his journey from Malaysia to Wall Street, and then deepening his efforts in the Chinese market, as well as his strategic considerations after determining in 2021 that blockchain had “stabilized” and heavily investing in Solana while personally taking on the role of Executive Director at Solana Company. The interview also covers the real dilemmas of RWA, Hong Kong's role in the digital asset landscape, and opinions on the reshaping of the crypto market cycle after the entry of traditional capital.

From Wall Street to Web3, a veteran investment banker’s “next move” and persistence

PANews: Hello Mr. Zhu, I am Tongtong, the co-founder and editor-in-chief of PANews. We know that you were the head of UBS Investment Bank in the Asia-Pacific region, with more than 20 years of brilliant experience in the capital markets, having witnessed the prosperous era of IPOs in Asia. For many readers in the Web3 field, you may still be somewhat unfamiliar. Could you please briefly introduce your background?

Mr. Zhu: Thank you for the opportunity today. My transition from the traditional industry to the crypto space has been a relatively long process, and I am happy to share my journey.

I am a Chinese who grew up in Malaysia, where the pace is slow and the society is relaxed, so my mindset is also relatively easygoing. At the age of 17, I went to the United States to study and spent 12 years in a relatively free environment. My career began with luck—I studied mechanical engineering and had no financial background. After graduating with my bachelor's degree, I worked at a traditional medical equipment company until I pursued an MBA and applied for a job on Wall Street.

Normally, a resume like mine would have a hard time getting into a top investment bank. However, it was during the peak of the internet bubble when many elites from top business schools rushed to start their own companies, which actually reduced my competition. Thus, I was fortunate enough to enter the company that was then called Solomon Brothers (which later merged with Citigroup). Of course, hard work is fundamental, but luck is indeed essential.

Once you enter, the investment bank will train you like a “slave,” forcing you to rapidly grow your abilities in a very short time. In such institutions, the amount of information you handle is enormous, and you must learn to analyze the whole world using logic, frameworks, and data. Investment banking is a global business, and analysts study various countries, industries, and companies from macro to micro, top to bottom.

I was involved in mergers and acquisitions in Hong Kong early on, participating in some large enterprises' IPO projects. One of the more famous ones was the restructuring of Bank of China Hong Kong, where we merged 12 banks and credit card companies into what is now the second largest bank in Hong Kong. After that, I went to Taiwan and also caught a wave of excitement.

Later, I saw the immense potential of China. At that time, everyone invested in China Mobile and China National Petroleum, buying the “China story,” the expectation of increased efficiency after the privatization of state-owned enterprises, a macro and long-term “China Bet.” I realized that to truly learn, I had to participate personally, just like investing in the cryptocurrency space today. I am not someone who leaves things to chance; I like to take the lead and break through.

So I went to China, and we made UBS's stock underwriting business the number one in the Asia-Pacific region, with the largest part of our business coming from China. I remember moving to the country in 2006, and we collaborated with the Beijing government to establish a joint venture brokerage - UBS Securities. In the first year, our A-share issuance ranked third in the country, second only to CICC and CITIC. It was a striving era, and the investment bankers in China worked very hard and thought about their clients. Looking back now, it was truly a case of being unaware of one’s own fortune, feeling that everything was taken for granted. That golden era of an economy rising straight up for over a decade is probably hard to replicate.

It was at that time that I began to pay attention to blockchain. I thought it might be a new entry point, a new hope. Because blockchain is likely to form a “barrier” or “no man's land” that is difficult for regulation to penetrate comprehensively. I hope blockchain can create an increasingly larger space for young people who love freedom and transparency, allowing them to create and innovate without being restricted by so many rules, just like the internet entrepreneurs of the 1990s.

I really liked this concept when I first saw it. We established a cryptocurrency bank in Switzerland at that time and began to focus on this industry. I had seen too many emerging industries grow from nothing, like China's first listed real estate company and the first 4S store. By 2021, I made a judgment: the blockchain sector had stabilized. Its scale was large enough, gathering many smart people, sufficient capital, and strong stakeholders. Even though major governments at that time did not support it, it had already gained market recognition. From that point on, we began to invest heavily and accelerate our development.

PANews: Summer Capital was established in 2018, focusing on two sectors: innovative healthcare and Crypto. However, I feel that between 2018 and 2021, you seemed to adopt a relatively cautious and watchful attitude in the Crypto field, only making significant efforts after 2021. Is that correct?

Mr. Zhu: Yes. Strictly speaking, Summer Capital was renamed and established in January 2018. We actually acquired a licensed fund company in Hong Kong in 2017, but it took time for the regulatory commission to approve the change of the actual controller, so the formal operation started after that.

To thoroughly understand an industry, a significant amount of time is required. You need to distinguish between good and bad people, identify genuine experts from fake ones, and know where to find reliable data. There are many so-called “narratives” in the industry that everyone logically accepts, but the actual development is not so. After several years of accumulation, we have figured out which industries are “evergreens.”

I think choosing Crypto was the right decision. It aligns perfectly with my interests and personality. I like to do things that rise from low to high, and at that time, Crypto was an “Underdog,” looked down upon by the traditional world, which was full of prejudice and discrimination against it. If I can prove them wrong and that we are right, that feeling of breaking through from the bottom up resonates with me very much. So, I believe choosing the cryptocurrency and blockchain industry is the correct choice.

The Birth of Solana Company: Seizing the Window, Executing Quickly

PANews: In August of this year, we saw Pantera join several institutions to establish a DAT called Solana Company, and you personally took on the role of Executive Director. Why did you decide to personally take on this important position?

Mr. Zhu: I am a person who will persist in execution after thinking clearly. Now is the right time for this industry, and this company just happens to be able to leverage my years of accumulated experience and strengths, such as how to face investors, regulatory agencies, and how a good listed company should operate. In these areas, I understand more than most people because I know the major institutional investors.

This opportunity is very rare. First of all, I have a good relationship with the Solana Foundation, which is located right next to our Swiss bank headquarters. We have long surpassed a business relationship and become friends, and this trust-based collaboration is very smooth.

Secondly, I want to do this in the United States. My thinking is very clear, and I know what I lack—a strong partner in America. At that time, the DAT sector was mainly a game for Wall Street, and there were only a few investment institutions with the most experience. Coincidentally, Pantera was a co-investor with us in some projects, so I visited them in New York, and we hit it off immediately. Of course, they also need to go through their internal procedures, as being a sponsor for DAT comes with risks. If you are just a shareholder, the risk is very low; but now, one must step up, carrying their own money, LP's money, and market money together, and in the U.S., the litigation risks are very high.

We probably started taking action in June. At that time, after I finished the board meeting, I noticed that several Solana-related projects in the market were not performing well. I actually considered whether to focus on Ethereum, because logically, the order is Bitcoin, Ethereum, and then Solana (BNB and Ripple are not in my consideration due to their lack of decentralization). Wall Street is very smart; they will look at the fundamentals of public chains.

But the market does not wait for anyone. While we were discussing, Joseph Lubin from ConsenSys and Tom Lee from Fundstrat respectively launched large projects based on Ethereum, and the market moved very quickly. I felt at that moment that we were slow, and the opportunity window for Ethereum was gone. So we decided: to fully commit to Solana.

Around late July, Pantera and the Solana Foundation both clarified their intentions. By around August 10, all internal procedures and legal issues were settled, and we obtained permission to use the name 'Solana Company.' From the decision to basically completion, we only spent four weeks, and we didn't even hire an investment bank, just lawyers and ourselves were working. At that time, we were very sensitive to the market, feeling that the time window was crucial, and the market wouldn't always go up. This really brought back the feeling I had during the IPO years of competing with others and returning to familiar battlegrounds.

The DAT Debate: The Real Competition Happens on Wall Street

PANews: There are actually several Solana DATs in the market right now, including one personally managed by Kyle Samani from Multicoin Capital. What do you think will be the core competitive points among these DATs in the future? What advantages does Solana Company have to win?

Mr. Zhu: Kyle (Multicoin) and Mike Novogratz (Galaxy Digital) are both people I respect quite a bit. I'm not very familiar with Jump. Their combination is quite interesting: one comes from a traditional investment bank (Mike is from Goldman Sachs and wants to create a new Goldman Sachs in the crypto space), one has grown up from the crypto space (Kyle), and another is a short-term trader (Jump).

But we do not quite agree with their approach. We believe that DAT is a business model aimed at Wall Street, and the main investors should be funds from the traditional financial world. You can see that after many DAT listings, a lot of effort was spent on signing partnerships and issuing announcements with various ecological projects in the crypto space, but this is actually meaningless; those people on Wall Street cannot understand it, and the stock price remains unchanged, even continuing to decline.

You must think clearly about what Wall Street investors want. During the life cycle of a listed company from a market value of hundreds of millions to tens of billions, different stages require facing different investors and doing different things, which may not be clear to those coming from the crypto space. Our advantage lies here. You need to know where the investors are: sovereign funds, pension funds, long-term funds, hedge funds, etc., and then find those that may convert in the short term, and begin to engage with those that require long-term follow-up (such as sovereign funds). This is a long race, with the goal of establishing a world-class listed company.

We are unique in our issuance structure, scale, and management approach.

• First, we keep the scale controlled at 500 million USD. Because if the scale is too large, it may not rise much. Some competitors want to “gather” all the money in the market, preventing us from raising funds, but this idea hasn't really understood the market. If you “gather” too much, you will include some investors who lack conviction, and when the lock-up period ends, they are likely to run away. What we are looking for are high-quality investors who believe in our team, recognize Solana, and have long-term capital. The stability of a listed company requires these core investors who focus on fundamentals.
• Second, we respect the rules of the capital market. You see, not long ago the market was bad, and many DATs controlled by people in the crypto space used various methods to delay the lifting of restrictions, fearing a drop in stock prices. However, we insisted on lifting the restrictions on time even when the market was at its worst. I wrote to all investors saying that we must fulfill our promises; this is corporate governance. If you do not keep your word the first time, who will believe you in the future? Those who believe in us can continue to hold; for those who want to leave, that is your choice.

It is precisely because of this strategy that our company has had the highest premium, liquidity, and trading volume since going public.

PANews: What are the main hesitation points for traditional investors during their engagement?

Mr. Zhu: This varies greatly in different regions. In the United States, investors are relatively mature; after reviewing your custodian, legal structure, etc., and if they meet the criteria, they rarely ask “Why Solana?” They are more concerned about your management philosophy and team.

But in the Asia-Pacific region, investors are indeed lagging behind quite a bit. Many CEOs of large funds really don't know what Solana is, and they haven't fully grasped Bitcoin or Ethereum either. They ask a lot of basic questions, such as: “Wasn't Solana often down before?” “Isn't that the coin from FTX?” They are just starting to research. This process takes time, just like some of my friends who said a few years ago that Bitcoin would go to zero are now quietly accumulating coins themselves. I believe they will gradually get into the game.

PANews: Will Solana Company participate in the ecological construction of Solana in the future? What will be the driving force for Solana's next development?

Mr. Zhu: Of course, we will participate. Solana is good, and we are good. We have also stated clearly in our cooperation agreement with the Solana Foundation that we will help them build the ecosystem in the Asia-Pacific region, including various activities and forums.

As for the driving force behind Solana's development, I think the upper management of the foundation is very visionary and determined. Their goals are clear: first, to improve technology and efficiency; second, to become the infrastructure of the global financial industry, bringing everything that can be on-chain to Solana; third, to unify global liquidity.

To achieve these goals, all their technological upgrades and ecological cultivation are working in this direction. To accomplish all of this, there are two key indicators:

• First, institutionalization, which means gaining acceptance from large institutions;
• Two is the number of developers. This is also why China is so important to Solana, as China has a huge pool of developers. As long as it can attract 10% of the developers from China to Solana, it will achieve rapid growth.

This is something I am very willing to help promote, because the concept of Web3 is that once the ecosystem is established, all benefits and interests are shared by the participants.

Cycle, RWA and Hong Kong

PANews: Apart from DAT, will Summer Capital also explore other areas? For example, the currently hot RWA and stablecoins in Hong Kong.

Mr. Zhu: I have now started my own venture, Solana Company, and I am basically all in. Our foundation will continue to support the projects we have invested in, but there may not be such a full-scale new layout.

Regarding RWA, I think it’s a bit excessive right now. Everyone wants to do it, but they may not have thought through the results. The core issue of RWA is liquidity. You tokenize assets that lack liquidity in the real world and then hand them over to the crypto world, which has a market cap of only three to four trillion dollars, this liquidity is far from enough. Why can DAT emerge in the short term? Because its direction is correct, guiding the vast funds from the traditional financial world into the crypto world with fundamental assets. In the short term, RWA may also need a structure similar to DAT to bring in external funds to activate it.

PANews: What do you think about the role Hong Kong will play in the Web3 field in the future? Will it continue in this state of “moving forward amidst confusion”?

Mr. Zhu: I have great confidence in Hong Kong. I have lived in Hong Kong for over 25 years, and the officials there are very commercialized and very flexible. Hong Kong has always been a channel for the integration of Chinese and Western cultures, with an open environment, a sound legal framework, and a mature third-party service system. In the field of digital assets, I believe Hong Kong will ultimately run faster and farther than Singapore.

Its “entanglement” lies in relying on China, which requires caution to prevent policy risks from spilling over into the domestic market. I think some places are indeed overly cautious. In the field of innovation, sometimes it is necessary to pursue speed first and perfection later. First, get done what can be done, and then gradually optimize.

PANews: You have experienced multiple cycles of traditional finance, while the crypto space often says “a cycle every four years.” Do you think this pattern will change with the entry of traditional capital? Which stage are we currently in?

Mr. Zhu: We are currently in a transitional period. The past cycles in the cryptocurrency world were more driven by faith, community, and narrative. In contrast, the cycles in traditional finance are longer, possibly 8-10 years, and are determined by macroeconomic factors, particularly liquidity and interest rates.

Now, with the massive influx of traditional capital and institutions, these two cycles are merging. The higher the institutional ratio of an asset, such as Bitcoin, the more its cycle will align with traditional financial cycles. Our goal with DAT is also to bring a longer and more stable cycle to the blockchain world.

Advice for young people: direction, focus, and trial and error

PANews: Finally, could you give some advice to the young people in our industry?

Mr. Zhu: I really envy you young people, because youth is the greatest capital. Many times, “ignorance is bliss” is a kind of strength. All the successful entrepreneurs I have seen possess a quality that is “perseverance”—once they see something they believe in, they walk steadfastly down that path.

Advice for young people is:

• The overall direction needs to be clear. Looking ahead to the next three to five years, which industry trends are clearly on the rise, and are supported by capital and talent? I think AI, automation robots, and Crypto are.
• Stay focused. Once you choose a major track, invest all your energy into it and do not get distracted.
• Dare to make mistakes. You can't think everything through; give yourself three chances to make mistakes.

I firmly believe that the blockchain industry is a field worth young people investing themselves fully (All in).