Posts Tagged ‘trust’

No contracts!

July 29, 2009

i gave a friend $50K a few month ago

no contracts

it is quite a bit of money and i am supposed to get it back next week

will i get any of it? some of it? all of it? with nice rewards?

i guess i will find out in a few weeks

but the point is, when are we willing to do deals without contracts?

in the Jewish diamond industry i understand it is common. it is a closed tight community with a high degree of trust. you break that trust once, and you are out of business.

in my business, lawyers make money, slow processes, and often, it turns out, do not do an outstanding job.

yet, i can not imagine a VC deal with no contracts

can you?

we can not get even to a ‘standard’ Term Sheet and every funding round takes about 45 days, usually arguing about the same things over again.

how inefficient!