Confidence Is The Foundation Of All Economic Activities

During a recent investment journey to the U.S., I found myself reflecting on the intricate dance of the capital market. Amidst these thoughts, my conviction in angel investing as a comparatively lower-risk endeavor than the often-speculative secondary market was reaffirmed. This perspective, born from years as a business owner and early-stage investor, forms the core of my investment philosophy.

The original Chinese version was published on July 8, 2015, and can be found here.

Sitting on a flight from San Francisco to Shanghai, my mind often drifts back to the profound insights gained from Silicon Valley—not just in potential projects and critical information, but also in a fundamental shift in mindset. My two-week investment trip to the U.S. this year was particularly significant. Against a backdrop of domestic stock market plunges and whispers of financial crises, this period led me to re-evaluate many facets of the capital game: human nature, women in business, technological innovation, robotics, entrepreneurship, investment philosophy, and even the broader meaning of life.

A Business Owner's Lens on the Capital Market

Though I lack formal education in finance or economics, my understanding of the capital market is deeply rooted in my experience as a business owner. From this vantage point, I primarily view the market as:

• A vital financing arena for businesses to secure capital for growth and innovation.
• A liquidation platform for early investors to realize returns on their initial stakes.

However, the reality of the market is far more intricate than these simple definitions suggest. I've observed that the primary market often involves rigorous negotiations with professional investment institutions, sometimes leading to challenging valuations for promising companies.

In stark contrast, the secondary market frequently presents an illusion of inflated valuations and the peril of stock bubbles. The astronomical price-to-earnings (P/E) ratios seen in some A-share market stocks serve as a stark reminder of this inherent risk. Here, the game often devolves into speculation, with a significant number of investors lacking a truly deep understanding of the underlying businesses they are investing in.

The Enduring Appeal of Angel Investing

Despite these complexities and the perceived higher risks in the secondary market, I find myself in a more favorable position as an angel investor in the primary market. My experiences have consistently demonstrated that the risk profile for angel investing is comparatively lower than the speculative nature of the secondary market.

Over the years, I've supported numerous startups. While some have inevitably failed, many have thrived, each journey reinforcing a crucial lesson:

"Angel investing isn't just about financial return; it's about perseverance and an unwavering belief in innovation."

This philosophy guides my decisions, steering me away from the volatile currents of market speculation towards the foundational work of nurturing new ventures.

Catalysts for Progress: Tech & Female Entrepreneurship

During my recent U.S. trip, my investment focus was sharp, concentrating on two powerful forces shaping the future: American tech startups and the rising tide of female entrepreneurial power.

Investing in Technological Innovation

The rise of robotics and advanced technology in startups has been a key area of interest. My investments include companies developing:

• Hotel service robots designed to enhance guest experiences.
• Retail assistance robots streamlining operations and improving customer interaction.
• Other specialized robotic applications poised to revolutionize various industries.

These ventures, while inherently high-risk, embody the transformative power of technological innovation. By betting on these early-stage tech companies, I believe we are not only mitigating the speculative risks of the secondary market but also actively contributing to meaningful advancements. This strategy aligns perfectly with my conviction that the primary market, especially for cutting-edge tech ventures, offers more promising and grounded opportunities.

Empowering Female Entrepreneurs

I've also observed and actively supported the burgeoning female entrepreneurial power. Women, I've found, possess a unique understanding of the consumer market, particularly female consumers. Their growing socio-economic status, coupled with their innate managerial skills, positions them as formidable and effective entrepreneurs. The future, driven by technological advancements, appears exceptionally bright for these women-led startups. My investments in such ventures are a testament to this belief in their immense potential.

Confidence: The Cornerstone of All Economic Activities

Ultimately, my investment philosophy distills down to one fundamental principle: confidence.

I strongly believe that the essence of economic prosperity and stability boils down to this single word. If individuals and businesses are confident about the future, their actions will naturally be guided towards proactive measures, innovation, and expansion, thereby fostering genuine prosperity.

My role as an angel investor directly aligns with this belief. I continue to invest in early-stage startups because I am convinced that technology and innovation are the true drivers of progress and sustainable economic growth. This unwavering faith is the bedrock of my investment philosophy. Despite the inherent risks and uncertainties associated with nascent ventures, I firmly believe that betting on groundbreaking ideas and committed, passionate teams is not only a worthwhile endeavor but a necessary one for societal advancement.

"Confidence isn't just a feeling; it's the fundamental belief that fuels action, innovation, and ultimately, the entire economic landscape."

This approach, I believe, is not only financially sound in the long term but also significantly contributes to broader societal progress, reinforcing the fundamental truth that confidence is indeed the foundation of all economic activities.

About the Author:

Leo Wang Entrepreneurship, Investment, Cultivation Founder of PreAngel Fund