With no assets or experience, a young Stephen Starr secured loans and deals by leveraging his personality. An early business partner described him as "very disarming," a quality Starr believes was key to convincing people to bet on him when logic dictated otherwise.

Contrary to popular belief, many large financial transactions are based on verbal agreements. In a world where reputation is everything, your word is your bond because, as Lloyd Blankfein says, if you break it, "you'll never eat lunch in this town again."

Merchant bankers operate on the belief that "lawyers like to complicate matters; we like to simplify them." Echoing Charlie Munger's advice to "not let lawyers kill deals," they prioritize trust and verbal agreements. This allows them to execute transactions with a speed and simplicity that would be impossible under a more legalistic, risk-averse framework.

Unlike banks that react to fraud, Palmer Luckey's Erebor is proactively partnering with intelligence agencies from its inception. The goal is to design a system where fraud is nearly impossible, creating a moat that attracts legitimate, high-value clients while inherently repelling bad actors who prefer less scrutiny.

When selecting a critical partner like a bank, issue an unusual but achievable task. This serves as a "Brown M&M's" test, revealing their attention to detail, resourcefulness, and willingness to serve. The partner who fulfills the difficult request is the one to choose.

When a venture capitalist asks a profound, introspective question (e.g., about your siblings), it might not be for evaluating you. Instead, it's a clever tactic to build rapport and make you feel understood, increasing the likelihood you'll choose them in a competitive funding round.

Merchant banks consciously limit their size and reject rigid corporate structures to maintain flexibility. This is a core competitive strategy against larger, slower institutions. Decisions are made through quiet, direct conversations between principals, not through committees or formal channels, enabling them to move with unparalleled speed and agility.

To combat fraud, some credit funds use the prospective borrower's due diligence deposit to fund deep background checks on founders and management as the very first step. Any past financial impropriety, no matter how old, results in an immediate rejection, making recent high-profile frauds avoidable.

A merchant banker secured a £200,000 credit line for a ship owner in three minutes over the phone, without any contracts. This highlights their core advantage: leveraging long-term trust and reputation to provide rapid, personal service that large, bureaucratic banks cannot match. Their business runs on confidence, not collateral.