Implied Suspicion vs. Implied Trust

I just had an exchange with an entrepreneur that I don't know. It went something like the following via several emails over the course of a week.

Entrepreneur: I'm working on something really amazing that I'm looking for funding for. Can we get together to discuss?

Me: Can you send me a short email overview so I can tell you whether or not it's something we'd be interested in exploring? I don't want to waste your time if it's not.

Entrepreneur: I'd much rather get together face to face.

Me:Can you send me a short email overview so I can tell you whether or not it's something we'd be interested in exploring? I don't want to waste your time if it's not.

Entrepreneur: My idea is special. Will you sign an NDA first?

Me: I don't sign NDA's. If you are unwilling to send me a short overview that you are comfortable sharing, then I don't think I'm a good target for you.

<time passes>

Entrepreneur: Following is an email describing my idea. Since you won't sign an NDA, you agree that by reading beyond this paragraph you are agreeing not to share my idea with anyone, forward this email to anyone, or discuss the idea without my consent.

Me: I have not read past the end of the first paragraph ("<paragraph copied>"). I have permanently deleted this email from my inbox.

Entrepreneur: Why aren't you willing to read my email?

Me: I'm unwilling to have an implied NDA applied to me via your email. You seem to be operating from a perspective of "implied suspicion." I don't work this way — I much prefer to operate from a perspective of "implied trust." Since you clearly don't trust that I'll behave responsibly, then I don't think I'm a good match for working with you.

I've written about my "fuck me once" rule in the past. In the book Do More Faster, I have a chapter about this — Wiley made me change the title to "Two Strikes and You Are Out" but the rule is the same. I enter every new relationship from the perspective of implied trust and allow this trust to be violated once (where it's my responsibility to bring up and address the violation.) If there's a second violation of trust, I'm done with the relationship.

I've generally decided not to engage in new relationships with people that approach things from a perspective of "implied suspicion." Yes, I know there are plenty of people in the world that behave badly, but I try really hard not to be one of them and when I do, I own my bad behavior, apologize, resolve things, and try to learn from the situation. It's easy to find out about me (both the good and the bad) if you are concerned about starting a relationship from a position of "implied trust" and — if you are interested in a relationship and unwilling to do the prep work to start from this perspective, I don't really know what else to do other than disengage.

I spent some time thinking about whether this was an inappropriate, arrogant, or naive position from my perspective and decided it's not. I'm already completely maxed on "new relationships" so setting a certain type of expectation for the entry into a new relationship (namely one of "implied trust") helps filter out relationships with people who I likely won't connect with anyway since they have a 180-degree difference in their view of how to approach a new relationship.

I know there is an enormous amount of noise around the system about "how to protect your idea" and "how VCs behave around your idea" although in my experience the noise is completely disconnected from (and much louder than) the actual signal. I'm curious what entrepreneurs think about this in the context of a first engagement with a potential VC investor that they don't know.

Reprinted from Feld Thoughts

Brad Feld is a managing director at Foundry Group who lives in Boulder, Colorado. He invests in software and Internet companies around the U.S., runs marathons, and reads a lot. Follow him at

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  • Alan Chamberlain

    I've coached hundreds of entrepreneurs, and many of them have concerns that someone will steal their idea. My advice: ideas are shit. Execution is everything. Someone already has your idea, and either is or is not executing on it. In any event, six months out of the gate someone is going to try to knock you off, anyway, and if they have the talent and cash to do so, they will succeed. Finally, don't believe that this is the only good idea you'll ever have.

  • Eric Golden

    As CEO of a venture-funded startup and a former general counsel, I can say that if nothing else asking for an NDA before disclosing an idea shows a lack of sophistication. Two reasons: First, entrepreneurs should realize that the short description of a business idea is worth essentially nothing. It is the management team, plan, ability to execute, and very fine details of product and strategy that inform value. If all you have to offer is that you came up with the idea first, you really have nothing to pitch...especially since the first mover advantage is often illusory -- the first venture to tackle a new business idea unearth all the problems and later movers solve them. Second, VC's business models involve investing in great business ventures, not stealing entrepreneurs' ideas.

    When I was raising venture funding (thankfully in the past for this venture), I never asked for an NDA unless we got fairly far down the path and had to disclose truly confidential information such as non-public patent applications. So far I haven't been burned...and can't really envision how I would be.

  • Dave Perlman

    There are three themes here, each noteworthy.

    Brad's basic premise - don't get involved with paranoid people - is 100% solid. If you don't trust me, then I can't start by trusting you.

    The second facet is his prospective fundee's inability or unwillingness to follow the standard protocol for a first meeting with a busy person: tell me what the hell we're gonna talk about so I can determine if it makes sense to take invest the time. Yes.

    Finally, as a longtime start-up/mid-sized company CTO, I can respond with my own viewpoint to Brad's question about how entrepreneurs fear (and concurrently need) investors. Everyone in entreprenuerville has heard the horror stories about how prospective investors have "borrowed" ideas. I would just say that if your idea has such a low barrier to entry that sharing the elevator pitch means you are exposed to destructive competition...well, maybe you need to rethink things...

  • Thealzel Lee

    Well put Dave ... "if your idea has such a low barrier to entry that sharing the elevator pitch means you are exposed to destructive competition...well, maybe you need to rethink things..." and I would follow-on to that with: Ideas are worth less than a dime a dozen. It's all about the execution.

  • kthread

    I'm a newb entrepreneur, but I've found it pretty easy to figure out what the VC's portfolio looks like most of the time with some basic research; it's on the entrepreneur anyway to know why the investor would be a good fit--that's why they are pitching them--and to already know how the investor acts in general (meaning, it's the beginning of a longer relationship if all goes well).

    So, I agree with your FMO rule, but I do also understand why some newb entrepreneurs get skittish about showing beta products through remote log-ins when they can't articulate the product (effectively) yet--