-
- Short Description:
- To attract more deal flow, some investors take the approach of throwing parties or being at the center of a social circle.
- Benefits:
- Building Trust: By building relationships that are not directly about work, you can build trust with a wider variety of people than those you are directly doing deals with right now.
- Top of Mind: Part of getting referrals in any business is being top of mind. One way to stay top of mind is to by socializing or hosting people frequently enough that they think of you when you when they have a deal. It is a form of advertising.
- Social Proof: If executed well and high-profile or trusted members of the community are seen with you, it can provide social proof that you are trusted and a valuable partner.
- Gossip: When people’s guard is down, they may share information about the ecosystem, deals or other companies that may be useful. Some people will come to social events in order to trade this information with others. As the host, you may learn valuable things.
- Trade-offs:
- Can Be Viewed as Frivolous: Throwing parties or continually socializing can be seen as frivolous.
- Complaint Risk: if the approach is to throw parties with alcohol and/or drug use, then you run an increased risk of misbehavior that will reflect poorly on the host even if you are not directly involved.
- Miss Out on Some Segments: There will be some in the ecosystem who will not participate in these types of events. Perhaps they do not enjoy social events, do not feel safe in a party environment, have other responsibilities, are not geographically close enough or do not have the means to pay their own way.
- Examples:
- One investor had a goal of hosting 100 parties in a year.
- Short Description:
