Yvonne Hao’s cellphone buzzed with a call from an unrecognized number. She answered it anyway.
“Hi, this is Maura Healey,” the voice said. Robocall, Hao thought.
But the veteran private equity partner quickly realized it was Healey herself calling that day in December 2022, asking Hao to join her administration. A couple days later, over lunch at the Cambridge Common restaurant near Harvard Square with Healey and Lieutenant Governor-elect Kim Driscoll, Hao learned the job they had in mind was one of the state’s biggest: secretary of economic development.
Hao was hesitant at first because she lacked government experience, but she quickly realized the impact she could have. For Healey, the choice of Hao couldn’t have been more fortuitous. When the tech scene got walloped in March with the collapse of Silicon Valley Bank, Hao, who spent her career leading and financing companies here and across the country, became the right person at the right time. With coolness and confidence, she helped guide the local tech sector through the immediate crisis, and gained the credibility to lead the innovation economy through uncertain times.
Hao “is a complete star,” says US Representative Jake Auchincloss, a Democrat from Newton who worked with both federal and state officials after SVB failed. “She, just by sort of temperament and presence, really stepped up in a galvanizing way.”
Her response to the banking crisis, as well as her deep experience in technology, venture capital, and private equity, helped her earn the No. 3 place on the Globe’s list of Tech Power Players. Hao, who is 48, has flown under the radar for most of her career, even as she worked for some of the region’s most prominent companies.
She spent nearly a decade at Bain Capital as an operating partner parachuting in to turn around portfolio companies. Afterward, she served as chief financial and chief operating officer of the Somerville online pharmacy PillPack, which she helped sell to Amazon in 2018 for $753 million. She later cofounded private equity firm Cove Hill Partners and served as an operating partner at venture firm Pillar VC.
In her position as secretary this year, she jumped right into the banking crisis, rallying state agencies, convening business leaders, and working with politicians to soften the blow of startups losing a primary bank and lender. Before SVB’s implosion, the tech industry was already in the doldrums with layoffs by the thousands and venture firms pulling back amid rising interest rates. And even though the federal government has stepped in to guarantee SVB depositors, Hao remains anxious. “This was very much a wake-up call for institutional investors, for venture firms, and for startups,” she says. “We’re in a new environment now.”
In particular, Hao worries that capital will be harder to come by, as borrowing money becomes more expensive and banks and investors tighten funding standards. She says the state can help fill the gap by redeploying money from quasi-state agencies such as the Massachusetts Life Sciences Center and Massachusetts Growth Capital Corp. for loans and lines of credit.
Meanwhile, Hao is working to win the state a cut of the billions of dollars in economic development money flowing from Washington. A top priority: the CHIPS and Science Act that Congress passed last summer to spur domestic semiconductor research and manufacturing. The Healey administration worked with the state Legislature to authorize $125 million in bonds to provide matching funds for federal assistance.
Hao also believes the Commonwealth, with its constellation of hospitals, universities, and life science companies, can contend for a new federal agency known as the Advanced Research Projects Agency for Health that aims to cure cancer and discover other medical breakthroughs. The administration has been working with a coalition of business and political leaders that formed last year to vie for a so-called ARPA-H hub.
Hao says she wants to keep money coming in because she remembers the Great Recession of more than a decade ago when funding dried up. Startups that could find enough to get off the ground — or just get through the downturn — were positioned to take off when the economy recovered, notably two of today’s biggest tech stars, Airbnb and Uber.
Innovation that yields new companies, new products, and new services — not to mention jobs — is more critical than ever to the state’s economy, says Jeffrey Thomas, executive director of Lever, a startup accelerator in North Adams.
The business cycle is growing ever shorter, he says. Companies such as IBM, AT&T, and General Electric enjoyed decades of dominance, but today’s stalwarts — think Facebook and Twitter — may get only 15 to 20 years. “The innovation economy is best able to adapt to the increasing rate of change, making it an evergreen source of jobs,” says Thomas, who has known Hao for years.
Hao understands that Massachusetts can’t grow without a pipeline of entrepreneurs and an ecosystem of money, mentors, and public policies to support them. Yet she is the first to admit that the state economy faces existential threats: labor shortages, high housing costs, and intense competition for talent when many people can work from anywhere.
She is putting together an economic development planning council and launching a listening tour to learn more about the barriers companies face. That work will help shape a plan that the administration expects to roll out in the fall — one that will likely build on Massachusetts’ strength of using academic research to develop the next generation of companies in life sciences and technology.
“In my business experience, by the time you realize that you’re terrible and you’ve lost it, it’s too late,” she says. “I wake up every day and feel a ton of urgency, that this is the moment now. We still have a chance to kind of rebuild, not just to maintain our spot. I want to lengthen the lead.”
Shirley Leung is a Business columnist. She can be reached at firstname.lastname@example.org.