Do you “like” and “respect” someone? But, do you “trust” that person? I learned about that today.
This morning, I spoke with a potential executive hire for one of our companies. I asked him what he thought of that company founder. Without hesitation, he said, “I like, respect, and trust that person.”
At Kepha, we often speak about how great it is when you work with people whom you both like and respect. There are many fun and interesting people, but who may not always have great judgment. You like them, but you don’t always respect them.
Then, there are extremely talented and capable people, who at times have bad people skills. You respect those people, but you may not want to hang out with them.
We think there’s something special when you can tick off the “like” and “respect” boxes about someone.
But, this morning, I found this executive really captured a new dimension, one called “trust.”
Trust is one of those outcomes that you cannot really predict. You meet someone, and you instinctively figure out over time if you can trust him or her. You basically feel that someone will “do the right thing.”
This executive then turned the tables on me. “So, why did you invest in the company,” he asked me.
“Honestly,” I said, “I trust that founder.”
I’ve written before that VC is basically a “trust business.” Investors give us a blank check book. We in turn invest in entrepreneurs. Investors in VC funds don’t know if a VC is golfing one day a year or 200. Similarly, we VCs do not know for sure what is really going on at a portfolio company. We’re not there all the time.
But, there’s a chain of trust that goes through the whole ecosystem among institutional investors, VCs, and entrepreneurs. It’s why trust is very powerful when it exists. It’s why it’s complete hell when trust is broken. It’s why being a VC means you are a fiduciary, where you’re called to do “the right thing.” The root word for fiduciary is fidēs, the Latin word for trust.
I feel grateful in that I trust Eric and Ed, and I feel that they trust me.
So, yes, I’m in the trust business. And, entrepreneurs are, too.