Navigating The 3 Trust Curves

TL;DR

Trust is crucial in closing deals, and there are three categories that determine the level of trust required for successful deal-making.

Transcript

foreign moving up the trust curves we talked about the breakfast I had this morning with Michael who said trust is the number one reason they got 400 million dollars worth of deals done in two and a half years and what we've found is that there's three types of trust that lead to getting the deal done and if you're an investor you can look at this ... Read More

Key Insights

• 😚 Trust is the number one factor in successfully closing deals and securing investment.
• 😤 There are three types of trust: trust in the leadership team, trust in the industry, and trust in the local opportunity.
• ✋ Raising capital from friends and family is often easier due to the high trust curve associated with personal relationships.
• 🍧 Being local to the opportunity and having knowledge of the industry increase the chances of securing investment.
• 🤝 Tailoring pitch deck materials to the average investor's understanding of the industry can improve the chances of closing deals.
• 😤 Meetings should have clear goals, whether it is to showcase the team's expertise, educate investors about the industry, or provide on-site tours to demonstrate the potential opportunity.
• 😚 Moving individuals up all three trust curves greatly increases the likelihood of closing a deal.

Questions & Answers

Q: What role does trust play in getting deals done?

Trust is essential in closing deals, as it provides confidence and conviction in the deal. Without trust, investors are likely to waste their time and won't be willing to invest.

Q: Why is it easier to raise capital from friends and family initially?

Friends and family are typically high on the trust curve as they have a personal relationship with the investor. They may not understand the industry fully, but they trust the individual and are willing to invest.

Q: How does being local to the opportunity affect the likelihood of getting investment?

Being local to the opportunity creates trust as investors perceive that the individual has a better understanding of the market and potential risks. This can significantly increase the chance of securing investment.

Q: How can pitch deck materials be tailored to different types of investors?

Pitch deck materials should be modified based on the complexity of the industry. If the industry is confusing, the focus should be on making it clear and understandable. If the industry is straightforward, the emphasis should be on team trust or showcasing the potential opportunity.

Summary & Key Takeaways

• Trust is the primary factor in closing deals, as it leads to $400 million worth of deals in just two and a half years.

• There are three types of trust that contribute to deal-making: trust in the leadership team, trust in the industry, and trust in the local opportunity.

• To increase the likelihood of closing a deal, one should strive to be high on at least two out of three trust curves.