If You Generate Trust, You Generate Money
I’ve noticed something that’s holding us back in the startup community: trust.
There are tons of people with money. There are tons of people with ideas. The trouble is entrepreneurs and investors don’t trust each other. It all breaks down when you’re asked to write a big check.
There’s a trust barrier put up by both parties, and it prevents capital from flowing. You’ve all been through this. Generally it looks like this:
Entrepreneurs:
“Is their interest really genuine?”
“Are they going to demand more control?”
“How much unsolicited advice are they going to give me?”
VCs:
“Does this kid really have the expertise to build this?”
“Can I really trust them with my money?”
“How do I know they won’t cut and run?”
And I’m just as guilty as anyone. I need to really get to know a person, believe in their vision, and gain confidence in their skills. And that takes weeks, sometimes months. In the meantime, they’re dying a slow death waiting for me to just write a check already.
Plus, there’s another layer. There’s a knowledge barrier too. I might not have the expertise to evaluate that specific startup. In which case, I’ll never feel fully confident about the investment and I’ll be less likely to trust my own decision.
The amount of time it takes both entrepreneurs and investors to overcome these barriers means more time umm’ing and aww’ing and less time building.
To fix that we need a trust network — a way to take the guesswork and uncertainty out of investing. At GrowthX we’re building a group of experts and limited partners who can be early customers. They’ll have domain expertise to know what product will work in a given market. They’ll do due diligence and give follow-on funding so they can fund larger amounts. With the GrowthX network you’ll never have to ask yourself, “Should I give this kid my money?” You’ll have people you know and trust who have already vetted and vouched for the project.
If we can break down these trust and knowledge barriers, funding startups will involve less risk, personal anxiety, and time spent drumming our fingers. Imagine how many more brilliant business ideas could get up and running this way.
