A business owner walks in with a pitch. He wants to “sell” you a piece of his company. The idea sounds solid. The opportunity feels right. You shake hands, cut the check, and walk away thinking you just became a business owner.
Then reality hits.
Nothing is in writing. No contract. No terms. No guarantees.
Was it an investment? A loan? A generous gift? You will not know until the other party decides to tell you—and by then, it might be too late.
I cannot tell you how many times I have seen this play out. People—smart, experienced, successful people—parting with six figures on a promise and a handshake. Friends, family, even complete strangers. And every time, I ask the same question:
Why?
It boils down to one word: trust.
We want to believe people will do the right thing. We want to avoid the awkwardness of asking for signatures and terms. We want to be the kind of person who does business on a handshake.
But here is the truth: A handshake is not a contract. A smile is not an obligation. A promise is not proof.
So respect your business partner. Trust them, even. But before you invest a dime, do one simple thing—get it in writing. Because trust is great, but a signed agreement is better.