While recently in Ber­lin mee­ting with inves­tors we were enga­ged in an inte­res­t­ing dis­cus­sion about Initial Coin Offe­rings (ICOs).  Our con­ver­sa­tio­nal coun­ter­party, an early-stage pri­vate inves­tor, was advo­ca­ting how great it would be if all invest­ments had tradeable, block­chain-based tokens, and the­r­e­fore the annoy­ing pro­blem with illi­qui­dity could be sol­ved. We under­stand the sen­ti­ment behind this thin­king, but believe it focu­ses too nar­rowly on avo­i­ding the nega­tive effects of a lack of trust and not ade­qua­tely on the posi­tive effects of the pre­sence of trust.

TRUST AND COMMITMENT ARE CRITICAL SUCCESS FACTORS

An important con­cept behind block­chain / decen­tra­li­zed led­gers is that one can eli­mi­nate the need for direct coun­ter­party trust in envi­ron­ments where trust can be dif­fi­cult to estab­lish. For exam­ple, estab­li­shing trust bet­ween par­ties that may have never inter­ac­ted with each other prior to con­sum­ma­ting a tran­sac­tion and when there is a low likeli­hood of repeat tran­sac­tions bet­ween the par­ties. There are situa­tions where the ability to remove the need for trust from the equa­tion can be extre­mely bene­fi­cial. Howe­ver, in our métier of ven­ture capi­tal and pri­vate equity, we believe that trust and com­mit­ment are actually cri­ti­cal suc­cess fac­tors that can­not be out­sour­ced to a face­l­ess, decen­tra­li­zed network.

At bm‑t we have recently recom­mit­ted our­sel­ves to working dili­gently to be the part­ner-of-choice for our inves­tee-part­ners. This part­ner­ship mind­set ori­gi­na­tes from a deep belief that when entre­pre­neurs and inves­tors work coope­ra­tively and openly with a com­mon goal that out­stan­ding results can stem from this deep trust and mutual understanding.

WE AT BM|T DO NOT INVEST IN BUSINESS PLANS; WE INVEST IN ENTREPRENEURS.

In essence, we aim to find busi­ness­peo­ple who we trust will find a way to create value even when plan A, B, or C does not mate­ria­lize as ori­gi­nally envi­sio­ned. We stron­gly believe that entre­pre­neurs should also cul­ti­vate and value this trust, which is accom­pa­nied by many posi­tive attri­bu­tes for peo­ple and com­pa­nies with big ambi­ti­ons – such as pati­ence, coope­ra­tion, com­mit­ment, and a co-war­rior mentality.

Indeed, in our view, entre­pre­neurs should be very wary of the siren songs of ICOs, instant liqui­dity, and not having to deal directly with pesky inves­tors, as those inves­tors are exactly the ones who are most likely to sup­port com­pa­nies when chan­ges to the busi­ness plan become neces­sary or in moments when a cate­gory falls out of favor with the crowd.

We at bm|t are working con­cer­tedly to create an envi­ron­ment of mutual trust by com­mu­ni­ca­ting pro-actively and trans­par­ently with our Inves­tee-Part­ners; and we highly value that same com­mu­ni­ca­tion in return. We view trust as a valuable long-term asset that can pro­duce great divi­dends, not some­thing to be outsourced.

Your Com­mit­ted to Trust bm‑t Team