From our BarterNews files of 1999:
Staggering Barter Agreement Jump-Starts New Business
Talk about an agreement that helped both parties ... Union Bank of
Switzerland (UBS) decided to give their business to new computer
services start-up Perot Systems in 1996. They did so because, in
addition to a good price and a promise of extra-special service,
they were given an option to buy 7 million shares of Perot Systems
stock at $3.65 a share, when the company went public.
Perot Systems made such an 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. On the second
day of trading after going public in February 1999, less than three
years after the contract and barter agreement was signed, Perot
Systems’ stock was selling at about $61 a share. And UBS was holding
a $400 million windfall!
How did founder Ross Perot fare on this barter deal with UBS, an
agreement that admittedly jump-started his new company? His 38%
stake in the company was valued at $1.4 billion. (Additionally, it
was the substantial UBS contract that enabled Perot Systems to go
public as quickly as it did.)
The barter technique (and perspective) used by Ross Perot isn’t
limited to super huge deals. You can, and should, use the concept —
regardless of your company’s size. What’s required is an awareness
by you that a barter component can be the determining factor in a
new business contract.
What should you offer? That depends on the situation, which a little
research will reveal. However, an exceptionally versatile commodity
you’ll always want to consider is trade credits. They’re valuable
and can be used in a variety of different ways by the other party.
