After Financial Freedom: Lei Jun's Angel Metamorphosis

Prologue: The "Burnout" Moment at the Hong Kong Stock Exchange

On October 9, 2007, in Hong Kong, at the celebration dinner for Kingsoft's IPO, champagne bubbles danced under the crystal chandeliers, reflecting excited faces. As the CEO, 38-year-old Lei Jun was the quietest person in the room. He held his glass, smiling and mingling with every guest who came to congratulate him. But only he knew that the smile was a mask. Beneath it was a huge, hollowed-out exhaustion and bewilderment.

For this day, he had fought like a soldier in the muddiest battlefield for 16 long years. From a young programmer to the head of a listed company, he had exhausted almost all his youth and passion. Now, the bell had rung, the mission was accomplished, but he felt like a burnt-out battery, completely drained of its last ounce of energy.

"I felt like every part of my body was protesting," he later recalled. "It was a weariness that came from the inside out."

Two months after the IPO, Lei Jun made a decision that shocked the entire industry: he resigned as CEO of Kingsoft. The official reason was "health issues," but the deeper reason was that he wanted to jump off the high-speed chariot he had been on for a decade, stop by the roadside, and think carefully about where his life should go next.

After selling his Kingsoft shares, Lei Jun achieved the financial freedom that many pursue their entire lives. He bought a villa in the suburbs of Beijing and lived the "retired" life of his dreams: waking up naturally every day, drinking tea, reading books, and meeting friends. This leisurely life, which seemed like the ultimate enjoyment to others, was a growing torment for him.

"I'm only 38. Is my life going to be just drinking tea every day?" he asked himself over and over. He soon discovered that fighting and creating were in his blood. He was not a man who could stay idle.

So, he found a new battlefield for himself—angel investing. It was a perfect role that allowed him to maintain his keen sense of the tech industry without getting bogged down in the trivialities of operations.

Act I: Investment Philosophy: "Don't Invest in What You Don't Know, Only Invest in the Right People"

Transitioning from a hands-on CEO to a strategic investor, Lei Jun quickly demonstrated his unique vision and sharp judgment. He didn't just throw money around like many wealthy individuals. Instead, he set two principles for himself that were simple on the surface but extremely difficult to follow:

First, don't invest in what you don't know. He strictly limited his circle of competence to the internet and TMT (Technology, Media, and Telecom) sectors. He would not touch business models he didn't understand, such as photovoltaics or agriculture, no matter how fantastic the stories were. "I must ensure that my understanding of the industry is deeper than the entrepreneur's," he said.

Second, invest in the person, not the idea. Lei Jun understood deeply that in the early stages of a project, the business model and product direction could change as quickly as the weather. The only constant was the captain of the ship—the founder. He spent a great deal of time "interviewing" entrepreneurs, observing their character, vision, ability to learn, and obsession with their products.

Yu Yongfu, the founder of UCWeb, is the classic embodiment of Lei Jun's investment philosophy.

In 2006, Lei Jun first met Yu Yongfu at the office of Legend Capital. Yu was seeking funding and spoke at length about the future of mobile browsers. After listening, Lei Jun politely but firmly declined. He found that Yu's understanding of the mobile internet was not even as deep as his own, an outsider.

However, Lei Jun did not reject Yu Yongfu as a person. Over the next year, he became Yu's "unofficial startup mentor." He regularly met with Yu for tea, sharing his thoughts on the industry, helping him sort out his strategy, and introducing him to key contacts, all without mentioning a word about investment.

It wasn't until 2007, after a long conversation convinced him that Yu Yongfu had transformed from an excellent professional manager into an outstanding leader, that he decisively invested. He not only invested himself but also brought his friends along. Later, UC Browser became one of the most important portals of the mobile internet era and was eventually acquired by Alibaba for a sky-high price, yielding Lei Jun a return of over 1000 times.

"I didn't invest in the UC project; I invested in Yu Yongfu the person," Lei Jun said in a post-mortem review.

A similar story happened with Li Xueling of JOYY (YY). Lei Jun had more than a dozen meals and countless all-night conversations with Li before finally deciding to invest. What he saw in Li was an almost neurotic obsession with community products and a deep insight into human nature.

Act II: Boarding His Own "Noah's Ark" with Others' "Tickets"

From 2007 to 2010, in the three years before founding Xiaomi, Lei Jun was perhaps the most successful and diligent angel investor in China.

His investment portfolio was star-studded: UCWeb, YY, Lakala, Haodf.com, GWC, Vancl... The nearly 20 companies he invested in later became unicorns in their respective fields. Someone joked that Lei Jun had single-handedly "bought up" half of China's mobile internet.

This period of angel investing was a precious "startup drill" for Lei Jun.

First, it allowed him to break free from the singular perspective of a "software company" at Kingsoft and to systematically review and learn the business ecosystem of the entire internet from a higher dimension. Through high-quality dialogues with dozens of the brightest minds, he quickly filled the gaps in his knowledge of e-commerce, mobile social networking, online payments, and other areas.

Second, it helped him accumulate an unparalleled network of contacts. He invested not just in companies, but in a "brotherhood" of China's top entrepreneurs. These people later became the most solid allies in the Xiaomi ecosystem.

Most importantly, this experience allowed him to see the future direction through the fog.

After being deeply involved in the development of many mobile internet companies, Lei Jun sensed earlier and more clearly than anyone else that an epic wave was coming—smartphones would replace PCs as the computing center for the next decade. The market at that time was dominated on one side by arrogant, expensive, and user-unfriendly traditional giants like Nokia and Motorola, and on the other by low-quality, no-experience-whatsoever counterfeit phones.

A huge, unclaimed territory lay before him.

Epilogue: The King's Return

One afternoon in early 2010, Lei Jun was having tea with a few friends in the tea room of his villa. In the middle of a lively conversation, he suddenly fell silent, then said, "I feel like all my investments these years have just been cheering for others."

His friends all looked at him.

He picked up his teacup, drained it, and put it down heavily. "The fire in my heart has never really gone out," he said. "I think I should do something truly great myself. It doesn't matter if I fail, but at least I will have tried."

He decided to enter the fray himself and start a smartphone company.

This decision meant giving up the leisurely and respected life of an investor and returning to the battlefield of entrepreneurship, a place of constant fire and a high chance of failure. He was betting all the reputation, connections, and wealth he had accumulated in the first half of his life.

At the age of 40, an age for understanding one's destiny, Lei Jun chose to set out again.

The experience of being an angel investor was like a "startup simulator" that Lei Jun had carefully designed for himself. He used others' "tickets" to board the "Noah's Ark" of the mobile internet, which was about to set sail, completing his reconnaissance of the shipping lanes and selection of companions.

When he decided to found Xiaomi, he was no longer the weary CEO struggling to keep Kingsoft afloat, but a top strategist who understood the big picture and held all the aces.

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Key Takeaways

1. Excellent investment stems from a deep insight into the industry's endgame: Lei Jun only invested in the TMT sector he was familiar with and, through systematic layout, deepened his judgment of the mobile internet's endgame. This allowed him to always spot the most promising tracks in advance.
2. 'Investing in the person, not the idea' is the golden rule of angel investing: In the early stages of a project, the business model is highly uncertain. The founder's ability to learn, character, and vision are the only core assets. Lei Jun's year-long "mentorship and observation" of Yu Yongfu is a perfect embodiment of this rule.
3. The best investment is paving the way for your own next venture: Lei Jun's angel investments not only brought handsome financial returns but, more importantly, allowed him to upgrade his cognition, accumulate connections, and choose his direction. It was the most thorough "pre-war reconnaissance" for founding Xiaomi.