The Fraternity Stock Market

Pandora, Groupon, LinkedIn, and coming soon to a portfolio near you: Facebook. If you’re a business major or just generally someone who keeps up with business news then you’re well aware of the recent scramble of tech companies to the IPO cash cow. Just the other day, Facebook was given a valuation estimate of $100 billion. These companies are searching for capital, which will hopefully result in both a better product and higher profits.

However, these companies also have to prove their worth both literally and figuratively. That’s what the stock market is all about, isn’t it? Is Company A worth so-and-so amount or is it not? Product recalls, poor leadership, bad money management, and failing to achieve benchmarks will result in a dropping stock value. On the other hand, the opposite of these negatives will attract confident investors eager to throw some money your way in return for an anticipated increase of value.

All business talk aside, isn’t this a rather nifty metaphor for a fraternity? If I run chapter A and we have strong leadership, a strategic plan, defined goals, rock solid dues collection and budgeting, and of course providing the best fraternity product on our campus then why wouldn’t others want to “invest” and join us? For a nice cherry on top of this sundae we also mention that those who invest with us will see an increase of value. With each bid signed and an additional investor we can use that capital to fund brotherhood retreats, run an effective LEAD program, host safe social events, and the added bonus of developing as a scholar, leader, and gentleman.

Now let’s say I run chapter B and we don’t have a very organized group of leadership, we’re in debt because we don’t collect dues very or bother to follow a budget, we don’t have any goals (which means we’re either in neutral or sliding backwards), and our overall product is mediocre at best.

In fact, to hide our downfalls we like to throw up the smoke-screen of parties and the image that everything is A-Okay (Sounds like Enron might have pulled a page from this playbook, actually). But then we had an incident thanks to our risky social practices. Now we’re wondering why no one wants to sign a bid and invest in us (or why we’re only attracting people who want to party).

Millenials are smarter than your average bear. If anything, to follow the running stock market metaphor, they’re smart bulls looking to invest in something that is going to provide them value for the capital they invest. So as you enjoy your summer vacation and reach that point of excitement to return back to school to see brothers and rehash your summer exploits, think about your answer to two simple questions: If your chapter were to launch as an IPO what would it be worth, and would it ultimately boom or bust?

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