The Circle of Trust

I've always been someone who treasures a small, close-knit group of friends. Some of them are from high school, others from college, and a few from the office. If you're in my circle, I trust you completely, and I'll help you in any way I can. It's how I've always been, but sometimes this attitude can be a double-edged sword.

The Startup Idea

Not too long ago, a close friend from college pitched me a startup idea. The concept was solid, a logistics business that would launch in the province. The business model seemed great, but I had doubts about the founder. Yet, because it was my friend presenting it, I gave it a chance. We eventually worked out an agreement. I'd invest ₱100,000 and receive a portion of the company's shares. After a few days, I received the memorandum of agreement, signed the papers, and handed over the check.

The Initial Promise

At first, everything seemed perfect. The app development was nearly complete, a designer was handling the marketing, and the Facebook page was already live. It felt like the business was on the verge of taking off.

The Gradual Disappearance

But as the months went on, updates became scarce. I started to wonder... Did I just get scammed? I had done my due diligence, the papers were legitimate, the business setup seemed solid, and the cash flow appeared to be moving. Still, I couldn't shake the uneasy feeling that things weren't right.

The Harsh Reality

The truth finally came to light. The founder, who had collected all the investor money, had vanished. Employees went unpaid, the office suddenly shut down, and the harsh reality set in. I had indeed been scammed.

From the accounts of former employees, their boss had seemed fine initially. The business was verified with legitimate papers, and cash flow was moving. But then, the boss reportedly faced some personal problems and went from hiatus to hiding.

The Expensive Lesson

Here's the big takeaway from my experience: No matter how solid a business model is or how legitimate everything seems on paper, you need to trust your instincts. Character matters just as much, if not more, than business potential. I should have paid attention to my gut feeling when I was skeptical about the founder. Even if you're dealing with a friend's company, don't let your emotions cloud your judgment. Make sure that the people behind the business have a track record of strong character, integrity, and reliability.

To my friend who introduced me to this company, there was nothing he could do. He was just an employee, and the money was out of his hands. But this experience reinforced something important. Even in business, trust must be earned, and sometimes, you have to walk away if something doesn't feel right...no matter who's presenting it to you.

In hindsight, I should have started small and tested the waters before dropping that ₱100,000. Just like in e-commerce, starting small allows you to minimize risks while you learn the ropes and find the right people to trust along the way.

Key Takeaways

• Trust your instincts: If something feels off, it probably is.
• Do thorough background checks: Not just on the business, but on the individuals running it.
• Understand the risks: Never invest more than you can afford to lose.
• Get everything in writing: Proper documentation can provide some protection.
• Be cautious with mixing friendship and business: It can complicate both relationships.
• Diversify your investments: Don't put all your eggs in one basket.
• Learn from setbacks: Use failures as stepping stones to future success.