The Party Is Over
Dot-coms go for substance rather than glitz
This fall, they probably wish they hadn't.
HSX was only weeks away from running out of cash and closing its doors when it merged with Predict It, a partnership that brought in a much needed $10 million in additional coin.
That story may have a happy ending, but as the holiday season nears, there are less dot-com companies around for this year's parties.
"Two years ago, the dot-coms spent money like it was water on parties," says Jeffrey Best of party planner Best Events.
But not anymore.
Best, who has planned parties for Microsoft, IAm.com, Evolution, Launch.com and Icebox.com, says the dot-com's that survived the summer are changing their attitudes toward shindigs, trying to portray themselves as fiscally reliable instead of Gatsby-like big spenders to their investors, customers and public.
"I'm seeing it with the ones who have already received their second round of financing," says Best.
According to the party coordinator, companies want substance not glitz. "Now they aren't so worried about getting stars at parties," says Best. "They've been burned paying the excessive personal appearance fees."
And while holiday parties may be toned down, they're far from cheap.
"The cost of doing events in a city like Los Angeles are not cheap," says Best. "And to get noticed is not easy."
However, Best says there are still those who think that an outrageously opulent party is the best way to bring buzz to a company.
"The ones who are waiting for their second round (of financing), some are canceling parties," says Best. "But others are giving it one last shot and throwing a blowout in hopes of attracting some attention."
However, Best says many L.A. party planners are now leery of taking on dot-com clients in fear of checks that bounce.
"What are you going to do when a company owes you ($30,000) or ($40,000) and then you read they've laid off 87 of their 88 employees," says Best. "The chances of you collecting your money are pretty slim."
