The Currency Nobody Puts On A Balance Sheet
I was recently standing in front of my Entrepreneurship Development class at BASE University, talking about funding.
Now, when you say the word “funding” to a room full of young entrepreneurs, something magical happens. Their eyes light up.
Suddenly everyone is Elon Musk. Suddenly everyone has “a big idea that just needs some capital.” Suddenly the future is so bright it needs sunglasses.
Then I said, “But first, let’s talk about where that first money actually comes from.”
The glow faded a little. Good. That means they were listening!
It Starts With the Awkward Phone Call
Every entrepreneur, without exception, begins the same way. Bootstrapped. Using their own savings, their old laptop, and possibly their mother’s kitchen table as office space.
And then, sooner or later, they run out of money – or realise they need more of it to go faster.
This is when they make “The Call.”
You know the one. The carefully worded WhatsApp message to a cousin. The “catch-up coffee” with an old college friend that is definitely, absolutely, not about asking for money. (It IS about asking for money.)
In the startup world, this is formally known as the Friends and Family round. It sounds very professional. It isn’t. It’s essentially organised begging from people who love you too much to say no!!
But here’s the thing I told my students – and it’s something most people miss entirely.
They’re Not Investing in Your Idea. They’re Investing in You.
Your aunt is not sitting at home, running a discounted cash flow analysis on your business model.
Your old college friend is not stress-testing your go-to-market strategy.
They are not impressed by your pitch deck. (Especially if you made it at 2am the night before.)
They’re writing you a cheque – or making a bank transfer, well, this is 2026 – because of you.
Because they know you. Because they like you. Because they have a relationship with you that goes back further than your startup idea does.
Behavioural scientists call this the ‘Liking Principle‘ – people say yes to those they know and trust.
And sociologists call the accumulated value of your relationships Social Capital – the invisible bank account you’ve been building (or not building) your entire life.
The idea is just the trigger. You are the investment.
Which leads to an uncomfortable but important question: what kind of investment are you?
Trust Is Not Built During the Ask. It Was Built Long Before.
Here’s where it gets interesting.
Even within the Friends and Family circle – people who already like you – there’s a second filter operating quietly in the background. It’s the question nobody says out loud but everyone is asking:
“Is this person trustworthy?”
Not “Is their idea good?” Not “have they done their market research?” But, do I trust them with my money? Do I trust them to be honest with me if things go wrong? Do I trust their character?
And the honest answer is: you cannot build that trust in the room where you’re asking for it.
That trust was built – or wasn’t built – in every interaction that came before this one.
This is why reputation is not a vanity project. It is infrastructure.
The groundwork you lay today – being reliable, being honest, following through, and not cutting corners – is the foundation that will hold your weight when you need people to take a leap of faith with you.
I told my students: start building your credibility now. Not when you have a pitch deck… Now!
Your Network is Your Balance Sheet. Keep it Clean.
This isn’t just about getting funded, by the way.
Whether you end up starting a business or working for someone else’s business – and most of my students will do both, at different points in their lives – the value of your network is directly proportional to the value people assign to YOU within it.
- A referral from a well-connected person who thinks highly of you can open a door that ten job applications cannot.
- A mentor who trusts your integrity will go out of their way for you.
- A well-wisher who has seen you be ethical under pressure will vouch for you when you’re not even in the room.
None of this happens if your reputation is shaky.
None of this happens if people quietly wonder whether you cut corners.
Your network is a resource. But it only works if the people in it think you’re worth the resource.
One More Thing. Don’t Cheat.
I know. You weren’t planning to. But hear me out, because this one matters more than most people realise – and for reasons that have nothing to do with getting caught.
Reason one: Even if nobody ever finds out – and often nobody does – you will know. And that knowledge quietly hollows you out from the inside.
Psychologists call this Cognitive Dissonance – the discomfort your brain experiences when your actions don’t match your self-image.
Over time, that discomfort doesn’t disappear. It just turns into a quiet, persistent erosion of your own self-worth. You will be fine on the outside and slightly broken on the inside.
Reason two: You will never know how good you actually are. This one is underrated. If your success was built on a shortcut, your brain registers that – even if nobody else does. True confidence – the kind that holds up under pressure, in a crucial meeting, in a hard moment – can only be built on genuine competence.
Shortcuts give you the result without the evidence.
And so, at exactly the moment you most need to back yourself, a small voice in your head will whisper: “But did you actually earn this?”
Don’t give that voice ammunition.
The Simplest Principle in Business (and Life)
I’ll leave you – and my students – with this.
All the things we talked about today – who funds you, why they trust you, what your network is worth, whether you carry yourself with integrity – they all come down to one thing:
Your reputation is your real startup capital.
It doesn’t show up on any balance sheet. It doesn’t get counted in your net worth. You cannot raise it on a funding platform or borrow it from a bank.
But it compounds quietly, every single day. In every interaction. In every decision where nobody is watching.
And when you finally need it – and you WILL need it – it will either be there or it won’t!
Well, now you know it too!
(What’s one thing you’re doing today that your future self will thank you for?)
Selected References:
- Cialdini, R. (1984). Influence: The Psychology of Persuasion. Harper Business.
- Putnam, R. (2000). Bowling Alone: The Collapse and Revival of American Community. Simon & Schuster.
- Coleman, J. (1988). Social Capital in the Creation of Human Capital. American Journal of Sociology, Vol. 94.
- Fehr, E. & Gächter, S. (2002). Altruistic Punishment in Humans. Nature, Vol. 415.
- Festinger, L. (1957). A Theory of Cognitive Dissonance. Stanford University Press.
- Bem, D. J. (1972). Self-Perception Theory. Advances in Experimental Social Psychology, Vol. 6.
- Ariely, D. (2012). The Honest Truth About Dishonesty. HarperCollins.
