The venture capitalists like to ‘sniff’ the deal, as part of their due diligence process before investing. There are many startups to look at and for active venture capitalists, they have to split the work. The venture capital industry sees millions of dollars of transactions, hence being discrete is very important, because any wrong information leak can cause millions of dollars of losses. Most of the big venture capital events in San Francisco Bay Area happen in Law firms.

The middleman do all the due diligence. For many organized venture capital and angel investors firms, the investors themselves do all the due diligence, and have teams that focus on various aspects. There are many special hires that deal with recruiting, greeting entrepreneurs, looking for partners, social currency in the form of contacts, organize events, throw parties, offsites and all other social events. The goal is to build a solid network, where deals can happen.

The venture capitalists all talk to each there. There are almost five events a night happening in the San Francisco Bay area, where the entrepreneurs have a chance to meet venture capitalists and middleman.