Asher's Blog

Founders face many difficult problems. Fundraising can determine whether a company survives long enough to realise its potential. Hiring can accelerate the business or quietly weaken it from within. Product-market fit can take years to discover, and product decisions can consume capital without producing value. Pricing, competition, regulation and cash flow can all make or mar a business.

But if I am being honest, the most challenging thing I have had to navigate as a founder has been relationships.

Numbers can be examined. Products can be rebuilt. Strategies can be changed. Relationships are more complicated because they carry memory, emotion, loyalty, expectations and trust. When a business disagreement involves a friend, mentor, investor, co-founder or long-standing partner, you are rarely dealing only with the transaction. You are also dealing with what each person believed the relationship meant.

This is why some of the most painful business problems do not begin with fraud or obvious bad intentions. They begin with assumptions that were never discussed, promises that were not defined, risks that were not allocated and difficult conversations that were postponed because everybody trusted one another.

The lesson I have learnt is not that relationships have no place in business. Business depends on relationships. The lesson is that friendship must never be used as a substitute for clarity.

Trust Is Valuable, but It Must Be Earned

I no longer give trust as easily as I once did. That statement can sound cynical, but I do not mean that everybody should be treated as dishonest. I mean that trust should grow from evidence: a person’s conduct over time, how they behave under pressure, whether they keep their word, how they handle money, how they respond to correction and what they do when keeping an agreement becomes inconvenient.

Stephen M. R. Covey argues in The Speed of Trust that when trust rises, speed increases and costs fall. You can see this in any long-standing commercial relationship. People who have successfully worked together many times do not need to renegotiate every minor issue from the beginning. They understand one another’s standards. They share information more freely, resolve small problems faster and can make decisions without protecting themselves at every moment.

That is an extraordinary commercial advantage. Yet the reverse is also true. When trust collapses, everything becomes slower and more expensive. Lawyers become involved in conversations that should have been simple. Payments are delayed. Information is withheld. Every sentence is interpreted suspiciously. Energy that should have gone into customers and products is redirected towards protecting positions.

The 2025 Edelman Trust Barometer, based on about 32,000 respondents across 28 countries, found that seven in ten believed government officials, business leaders and journalists deliberately misled people through statements they knew were false or gross exaggerations. That research concerns institutional trust rather than private commercial agreements, but it reveals the environment in which leaders now operate: people are increasingly alert to the possibility that they are being manipulated.

In that environment, credibility is not a soft virtue. It is commercial infrastructure.

Do Not Ask Trust to Do the Work of an Agreement

One of the biggest mistakes people make when doing business with friends is saying, “We trust each other, so we do not need to put everything in writing.”

I now believe the opposite. The more valuable the relationship, the more carefully it should be protected by clarity.

A written agreement is not an accusation. It is a shared memory created before circumstances change. It records what the parties intended while everybody was calm, optimistic and able to negotiate freely.

People remember conversations differently. Even honest people can hear the same promise and leave with different expectations. One person thinks an investment is repayable within twelve months; another believes repayment depends on the business reaching profitability. One believes a contribution earns equity; the other considers it a temporary loan. One assumes an arrangement will last indefinitely; the other believes either party can leave whenever they choose.

When the relationship becomes strained, memory begins to serve interest. The ambiguity that once felt friendly becomes dangerous.

This is why every important business arrangement should answer basic questions:

• What exactly is each person contributing?
• What is each person receiving in return?
• Who has authority to make which decisions?
• What information must be shared, and how often?
• What happens if performance falls below expectation?
• What constitutes a breach?
• How will disagreements be escalated and resolved?
• How can either party exit?
• What happens to money, shares, intellectual property, customers and obligations when the relationship ends?

You should understand the exit before entering the agreement. This is not because you expect failure; it is because responsible people decide how risk will be handled before emotion and loss make cooperation more difficult.

If You Are Giving Credit, Friendship Is Not Collateral

The need for clarity becomes even more important when money is being lent.

Imagine that you are extending credit to a friend’s company. Because you know the founder personally, it may feel uncomfortable to request financial records, security, guarantees or a formal repayment structure. You may worry that asking detailed questions suggests you do not trust your friend.

But a loan is not made safe by affection. Before extending credit, you should understand why the money is needed, how it will produce the cash required for repayment and what will happen if the expected cash flow does not arrive. You should examine the borrower’s existing obligations, repayment capacity and authority to enter the transaction. The agreement should define the principal, interest or return, repayment schedule, events of default, reporting duties and remedies.

If collateral is involved, identifying an asset is not enough. The lender must confirm ownership, value, existing claims and whether the security has been properly documented and perfected under the relevant law. A document described casually as a “guarantee” or “collateral agreement” may not protect anyone if it was drafted poorly or never completed through the required legal process.

These details require qualified legal, tax and financial advice in the relevant jurisdiction. The exact structure will differ between countries and transactions.

Due diligence does not insult a trustworthy borrower. It protects both parties from entering an obligation that reality cannot support. If the deal cannot survive reasonable questions before the money is transferred, it will not become safer after the money has disappeared.

One principle I have adopted is simple: friendship may explain why we are willing to explore a transaction, but it should never be the only reason we approve it.

“Business Is Business” Does Not Mean Becoming Insensitive

I often say that business relationships should remain separate from friendship and emotional connections. Business is business. The economics, responsibilities and risks must be treated objectively.

However, that phrase can also be misused. “Business is business” should not become permission to behave without empathy, gratitude or honour. A contract may give you a right, but wisdom still has to guide how and when you exercise it.

When you are dealing with people who trust you—and especially with friends—you must learn how to handle sensitive issues sensitively. The standard should not be lower because they are friends; in many ways, the standard should be higher. You should not exploit their patience, assume they will understand indefinitely or disclose problems to them later than you would disclose them to a formal investor.

Brené Brown puts the principle plainly in Dare to Lead: “Clear is kind. Unclear is unkind.”

Clarity can feel uncomfortable in the moment, but confusion usually becomes more painful later. It is kinder to say that a payment will be delayed than to give a date you already know is unrealistic. It is kinder to explain that the business is struggling than to keep presenting an optimistic version until the problem becomes impossible to hide. It is kinder to say that an arrangement is no longer working than to withdraw emotionally while pretending that everything is fine.

Sensitivity is not avoiding the truth. It is delivering the truth with respect and allowing the other person enough information to make responsible decisions.

Communication Must Increase When Things Go Wrong

One of the most dangerous responses to a business problem is silence. When people are embarrassed, afraid or unsure of the solution, they often delay communication. They tell themselves they will speak when they have better news. Meanwhile, the other party notices that something has changed. Messages take longer to receive a response. Reports arrive late. Dates move without explanation. Because no reliable information is available, suspicion begins to fill the gap.

By the time the difficult conversation eventually happens, the original problem may no longer be the biggest issue. The breakdown of trust has become a second problem.

When something goes wrong, lean in. Communicate earlier and more frequently. Explain what has happened, what is known, what is still uncertain, what action is being taken and when the next update will come. Do not disappear because you do not yet have a perfect solution.

A good difficult update should contain five things:

1. The fact: What has happened, without exaggeration or concealment?
2. The impact: What does it mean for the other party?
3. The responsibility: What part of the problem belongs to you?
4. The response: What are you doing now?
5. The next commitment: When will you communicate again, and what can you responsibly promise?

Communication does not guarantee that everyone will be pleased. It does, however, show respect. People can often work through a commercial disappointment when they believe they are being told the truth. What they find much harder to forgive is discovering that important information was deliberately kept from them.

Do Not Sweet-Talk Your Friends

Founders are trained to sell. We sell the vision to employees, the market to investors, the product to customers and the future to ourselves. The ability to communicate possibility is valuable, but it becomes dangerous when we use it to make people close to us ignore real risks.

Do not sweet-talk your friends into a business decision. Do not give them only the most attractive version of the opportunity because you know their trust will reduce their scepticism. Do not allow your personal relationship to become the reason they fail to conduct proper diligence. Tell them what is working, but also tell them what is not working. Explain the assumptions. Identify the risks. Give them room to obtain independent advice and to say no without damaging the friendship.

The familiar advice to “underpromise and overdeliver” contains useful wisdom, but it should not become a game of artificially lowering expectations. The deeper principle is to make promises from evidence rather than enthusiasm.

If you are uncertain, say you are uncertain. If a projection depends on several conditions, name them. If the business needs time, do not promise speed merely to secure the transaction. If you make a commitment, record it, monitor it and communicate before the deadline if circumstances change. Credibility is built when words and reality repeatedly meet.

Separate the Roles Without Denying the Relationship

When friends do business together, it helps to identify which role is active in each conversation.

Two people may be friends, shareholders and directors at the same time. In one conversation, they may be offering personal encouragement. In another, they may be exercising legal duties to the company. In another, one may be a creditor demanding repayment. Confusion arises when a person speaks in one role but expects the privileges of another.

A friend may say, “Please understand what I am going through,” while the creditor must still ask, “What is the revised repayment plan?” Both statements can be legitimate. The challenge is to prevent empathy from erasing accountability or accountability from erasing humanity.

Practical boundaries help:

• Hold formal meetings for material business decisions.
• Record decisions and circulate them promptly.
• Use independent advisers where interests may conflict.
• Do not make major commitments through casual conversations or ambiguous messages.
• Separate personal gifts from investments and loans.
• Agree in advance how confidential information will be handled.
• Recuse conflicted decision-makers where governance requires it.
• Schedule relationship conversations that are not disguised negotiations.

These practices may appear formal, but good governance reduces the emotional pressure on individuals. Instead of every disagreement becoming a test of friendship, the parties can return to a process they agreed upon together.

Design the Difficult Conversation Before You Need It

Most people design partnerships for good days. They discuss growth, profits, influence and everything they will accomplish together. Far fewer people discuss what will happen if the business loses money, one partner stops performing, somebody wants to sell, a founder becomes ill, additional capital is required or trust is damaged.

The best time to design a difficult conversation is before the difficulty arrives.

For founders and shareholders, this may include vesting, decision rights, reserved matters, transfer restrictions, dilution, deadlock procedures, founder departure, misconduct, disability, death and dispute resolution. For lenders, it may include covenants, security, information rights, default, restructuring and enforcement. For strategic partners, it may include service levels, customer ownership, intellectual property, exclusivity, termination and transition responsibilities.

No agreement can predict every event. The objective is not to eliminate uncertainty; it is to create a fair process for managing it.

William Ury, co-author of Getting to Yes, encourages negotiators to develop a clear alternative before entering an agreement. Knowing your best alternative to a negotiated agreement—often called a BATNA—helps you avoid accepting terms merely because emotion, urgency or friendship has made walking away feel impossible.

You should know how to say yes, but you should also know the conditions under which wisdom requires you to say no.

Trust Should Produce Better Governance, Not Less Governance

Trusted relationships create enormous advantages in business. They allow people to move quickly, share opportunities, extend goodwill and solve problems without turning every difference into a battle. Some of the most valuable relationships in my own journey are with people who have trusted me and whom I have learnt to trust.

I still believe we need friends in business. We need people who know our character beyond one transaction, people with whom we can have honest conversations and people who will remain constructive when circumstances become difficult. Business would become unnecessarily cold and inefficient if every relationship operated from suspicion.

But the proper result of trust is not the abandonment of governance. Trust should make good governance easier because both parties are willing to be transparent, define expectations and accept accountability.

If someone says that documentation is unnecessary because you are friends, ask why clarity threatens the friendship. If a person becomes offended when you request basic diligence, consider what that reaction is telling you. Trustworthy people may negotiate the terms, but they should not be afraid of accurately recording them. The strongest partnerships combine relational trust with structural clarity.

What I Would Do Differently Today

If I were entering an important business relationship today, I would move more deliberately.

I would spend time observing the person before placing significant trust in them. I would examine how they have treated previous partners, employees, creditors and investors. I would pay attention not only to how they behave when everything is going well, but also to what happens when they are disappointed or under pressure.

I would define the commercial arrangement independently of the personal relationship. I would ask qualified professionals to document it properly. I would identify the risks, determine who carries each risk and agree what will happen if important assumptions fail.

I would discuss the exit at the beginning. I would avoid promising from optimism. I would communicate challenges early, particularly when another person’s money or reputation was exposed. I would not wait until I had solved every problem before giving an update.

I would also protect the human relationship. I would remember that a difficult transaction does not automatically make the other person an enemy. I would listen carefully, clarify misunderstandings and distinguish bad intent from a genuine difference in expectation. Where repair was possible, I would work towards it. Where separation became necessary, I would still try to leave with honesty and dignity.

Some relationships cannot be preserved. Some breaches are too serious, and some patterns make continued partnership unsafe. Forgiveness does not always require renewed commercial access; you can release bitterness while maintaining a boundary. That, too, is part of wisdom.

The Hardest Work Is Often Human

The hardest problems in business are not always the most technical ones. You can hire advisers to structure a fundraising round. You can employ engineers to improve a product. You can analyse customer data to refine product-market fit. But no adviser can completely remove the emotional difficulty of telling a friend that an agreement is not working, confronting a trusted partner about a broken obligation or accepting that somebody you believed in is no longer safe to build with.

These moments test more than intelligence; they test courage, judgement, patience and character.

My greatest lesson is not to remove relationships from business. It is to handle them with greater maturity.

Build trust slowly and honour it seriously. Put important agreements in writing. Understand the risks and the exit before money changes hands. If debt is involved, examine repayment capacity and secure it properly. Do not overpromise or sweet-talk people because they are close to you. When trouble appears, increase communication instead of disappearing. Tell the truth with sensitivity, and let good governance carry some of the weight that friendship was never designed to carry.

Business must remain business, but the people involved remain human. Learning to honour both realities has been one of the most difficult—and most important—parts of my journey as a founder.

References

• Brené Brown, Dare to Lead
• Stephen M. R. Covey, The Speed of Trust
• Roger Fisher, William Ury and Bruce Patton, Getting to Yes
• Patrick Lencioni, The Five Dysfunctions of a Team
• 2025 Edelman Trust Barometer

This article contains general business principles and is not legal, tax or investment advice. Agreements, credit arrangements and security interests should be reviewed by qualified advisers in the relevant jurisdiction.