Think Barter When Expanding Your Business For A Big Pay Day
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A business relationship between Perot Systems and the Union Bank of Switzerland (UBS). Entrepreneur Ross Perot used barter to “seal the deal” and catapult his new company forward…and quickly pocketed over a $1 billion as a result. In 1996 Perot Systems, then a new computer startup with a famous person leading the company, was able to secure a contract to run the technology department for the Swiss financial giant’s investment bank and other units because of a Perot-envisioned barter offer.
Succinctly, UBS agreed to a 10-year agreement because of an exceptionally good offer and extra-special service…but also because they were provided an option to acquire 7 million shares of Perot Systems stock at $3.65 a share, when the company went public. Perot Systems made such a barter agreement because they needed a substantial contract, and had to “outbid” their bigger rivals IBM and EDS. The UBS contract accounted for 25% of Perot’s revenue. Less than three years after the contract/barter agreement was signed, Perot Systems became a publicly traded company. On the second day of trading, its stock was selling at $61 a share—and UBS was holding a $400 million windfall! Founder Ross Perot fared exceptionally well on this barter deal with UBS too, as the agreement admittedly jump-started his new company plus his 38% stake was valued at $1.4 billion. Expanding your business? Follow Perot’s strategy and you can rapidly move toward your end goal.
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