We're going to talk about trust next because everyone talks about the family office space. They
talk about how they meet families, how families meet each other. So if you guys bear with me, I'll
tell a quick one-minute story that will illustrate this unfortunately perfectly. So Milken,
before COVID, I came over with a friend of mine. We ran a massive panel focused on family office
and film with 60 different panelists all in this room. And I was with my friend Paul.
And there was a lot of really good mocktails and drinks at the event. And then we went to the
bathroom. And somebody saw his name tag in the bathroom. And Paul's last name is Dalio.
And his dad, Ray, was going to speak soon after that. And this guy came up as we're washing our
hands, just talking with us. And he talks with us. He's trying to figure out if I'm important, if
I'm important for Paul, if Paul's going to get the vibe with him. And if any of you have ever met
Paul, unless you care about the arts. Paul's not going to have that conversation with you. And we
finish and we leave this bathroom and the guy wants to shake our hands to meet us.
And we look at him and we go, dude, you didn't even wash your hands. Because he was so focused on
the opportunity he forgot to be human. He forgot family offices are people too.
And he missed the opportunity because I was the gatekeeper running a company for Ray.
Paul had no interest in talking to them, but by dismissing me and really disgusting Paul,
he lost what he thought was his opportunity. So with all of you guys, right, everyone can approach
you and go, I have a deal, I have a deal, I have a deal. But I want to talk about trust. Randy,
I want to start with you. What builds trust for you, especially with 45 years of doing this
yourself, to understand that an opportunity and the people behind it are something that you're
going to spend your time and energy exploring yeah so let me just say so i spent 45 years uh
running a national family office practice for a public accounting firm i built started family
offices so i got to meet a lot of people and like even my family office we have a we're very formal
structure so we have an investment committee The investment committee has set up certain roles on
how we establish trust and who we're going to meet with. But a lot of it is really past
performance, who we meet from other families, relationships, friends, people we meet at different
meetings, and also who have similar interests. The other thing is we will also,
with a family we trust, we will co-invest with the family. you know, which is important to us, you
know, where people say you got to have money in the game. It's key to us. Anybody we go in, they
have to have money. You know, they're invested or, you know, they've been involved for a while. But
it's really getting to know the people. You just don't make an investment, meet somebody, and then
you make an investment. You have to do due diligence. And the key to me, which I found very
special, you have to build a relationship. If you don't build a relationship with somebody, it's
not going to happen. Can I jump in if it's all right? I was going to ask you next. So I was
listening to your story and thinking about what you'd shared. And I've kind of really spent a lot
of time thinking about this quotient, like this equation for trust, right? Like, what is the
equation that drives trust? And it's in building relationships. And, you know, many of you may know
this, you know, have heard this before. But if you think about reliability, credibility,
intimacy at the top. And then if you think about self-interest at the bottom,
right? Are you reliable? Are you credible? Is there intimacy in the relationship?
If you add those up together, then you meet somebody new, and they're not only shilling whatever it
is they care the most about, meaning their self-interest quotient is lower, that math equation
builds trust really fast, right? And that's something that I think over time has served me really
well. and building relationships and building trust. Am I reliable? Am I credible?
Is there intimacy divided by, am I all about me? And if that number on the bottom is lower and the
top is higher, trust accelerates really fast. And I found if any other way, it slows down.
And so that's something that hopefully could be helpful to some of the people in the room. That's
been really helpful for me. Well put, Brian. Thank you. So Eric, the way you present yourself
online, you had this reawakening. to figure out what really mattered. So when that shifted in your
life, not just the exit, but the focus with your family and health and everything, how did it shift
for you in terms of how people approached what you saw as valuable relationships,
whether you're investing in what you call the boring stuff, like real estate, or you're doing
really exciting new defense stuff we can't talk about?
So for the benefit of you in the room, what I think you're referring to here, David, was the wake
-up call that happened to me. So I was always trying to be the smartest guy in the room and chasing
all these things and Silicon Valley all in all. And I was back in Stockholm and I was hanging out
with my friends from my cycling club and I hadn't been racing my bike for a long time. And then my
brother calls me and he talks to me all the time. But I heard something different in the tone. And
he said, Eric, stage four lymphoma.
My wife hasn't delivered yet. So he calls me and he has like a pretty good chance of survival,
but he also had a pretty decent chance of not. And that he tells me six hours before he becomes a
father. It changed me completely. And I think that's what you referred to. And I just start
realizing how precious life is. And in the context of trust building and who you want to be working
with, I shifted from trying to be, you know, a decently fast mountain bike racer.
to actually live my life till i'm 100 and live with a capital l-i-v-e and this was not like a
plot or something for me to try to build my office around and how to you know work with better
investments and get engaged with really great people but every single time i'm engaged in a
conversation with someone that wants to invest with us and join our fund and you know invest
alongside us The conversation is always around how do I actually live a better life?
How do I take care of my own health? How do I take care of the people around me? And for me,
that trust building is like very, very meaningful. I've helped people. And I will never forget when
this guy who made $25 million out of an IPO we did in Silicon Valley, he didn't need it.
He already had probably a couple of hundred. But he was just so excited about that. But he
literally said, I'm a little chubby. it's like how do i get in shape how do i do this and i said
you know just do this and i gave him some coaching on how to change his life and do that that trust
building that comes of a human nature where you're actually truly helping people that's what i
think is so important and was really changed our life and all interactions we have with people that
are joining us with this that's the deeper conversation we have because i don't want to keep
talking about ai forever everybody knows what that is but it has changed obviously all analytical
cycles down from months and weeks into hours right it's all neutralized playing ground we can all
vet the deals we can all make sure that we do that due diligence but the deep due diligence
diligence that you can do on a more human nature that only comes when you actually truly can share
and you actually have some joint values for doing that so that's what i've learned and i find it
extremely rewarding and for me it's so cool to see that we have all the tools that is doing all the
stuff that used to take time and effort away from that but we just put that down now now it's all
about actually getting to know the people behind that and that's what we are seeing in terms of the
trust yeah Very well said, and thank you for sharing that. The man who created what is named after
him, the Dunbar number, did research then for the following decade, which showed that even in this
current era, to build real trust takes between 7 to 10 years. And it is shortchanged by those that
are purposeful, Eric, as you're talking about. And Randy, you put that time in.
decades with all these people to build that and brian your the comment on whether somebody is self
-interested it's very hard to find somebody who's purposeful who's also incredibly selfish it's
much easier to find somebody purposeful where people can align but james the art world is entirely
different you are banking on things that in six months could be incredible or in 600 years could be
that and having been in that art world for years myself there's such um fakery and pretension with
so many people. So how do you build trust in a space where you're backing people who you believe in
and people also expect a return or a different valuation in their assets?
By being vulnerable, which thank you for sharing that story also.
I feel like just family offices, investors, maybe as people in general,
we get in our own way. allowing us to trust others and i think it's vulnerability that's a key
component to that um all the people i like love in my life that i trust are people that can hurt me
in some way can destroy me uh they choose not to and i like to think they choose not to in the
moments when they could probably do it and get away with it so when we as investors let's say when
we trust people with our capital or our time
our thoughts at for for personal relationships our hearts when we give that to people and they
actually cherish that and they don't use that against us that's when we know that this is a person
that we can trust and we can actually do that really fast and we can do that quite nominally so uh
that's when it comes to artists we uh you know we we act first they need the money they need the
time they have questions whatever it is we give it and we see how it's returned Great. And I
appreciate you sharing that because vulnerability is key. Join the Family Office Club by visiting
familyoffices.com. We look forward to seeing you at our next live event.