Turning Down a Quarter Billion Dollar Offer From State Farm with Payam Zamani | Built to Sell Radio
April 5, 2024 |
About this episode
Subscribe:
This week we’re bringing you an extraordinary story of resilience and determination as we delve into the lives of Payam and Frank Zamani. Starting their American dream with a mere $75, the brothers embarked on a venture that led to the founding of Autoweb, a groundbreaking lead generation service in the auto industry.
Autoweb’s journey to success reached its zenith with an IPO that valued the company at an astonishing $1.2 billion, with shares peaking at $50. However, the narrative took a dramatic turn as investor demand for a new CEO led to a steep decline, plummeting the share price to a mere 18 cents.
Through the turbulence, Payam Zamani’s story unfolds as one of unwavering spirit and the relentless pursuit of a vision despite formidable challenges.
Tune in to hear how Payam navigated the highs and the heartbreaking lows of Autoweb’s saga as he offers a treasure trove of lessons for capitalists.
Show Notes & Links
Connect with Payam on LinkedIn
Definitions
Procurement: This is the business process of identifying, selecting, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process.
Liquidation Preference: Let’s say you’re at a party, and everyone at the party has chipped in to buy a pizza. But before the pizza arrives, the party gets cancelled. Now, you’d want to make sure you get your share of the money back that was collected for the pizza, right?
In the world of business, a “liquidation preference” is a bit like that. It’s a rule set in a contract that says who gets their money back first if the “party” (in this case, the company) has to shut down and sell off everything it owns.
Usually, this rule is set up to protect the people who took the biggest risk by investing money into the company. These folks usually own something called “preferred stock,” which is a special kind of ownership that comes with some extra privileges. One of those privileges is often a liquidation preference.
So, if the company goes under or is acquired, the people with the liquidation preference (usually the investors or preferred stockholders) get in the front of the line to get their money back. They get paid before anyone else, like employees who own regular shares (“common stock”) or lenders who the company owes money to.
In simple terms, a liquidation preference is like a VIP pass that ensures you get your money back first if a company has to shut down or gets acquired. It’s a way to protect the investment of people who put in money, often at the early stages when the company is most at risk.
About Our Guest
Payam Zamani
Payam Zamani, founder of One Planet Group, is an entrepreneur and investor recognized for merging business with ethical principles. Escaping Iran at 16 due to persecution for his Baha’i faith, he settled in the U.S. and later co-founded AutoWeb, an early online car marketplace. His book “Crossing the Desert” recounts his life’s journey and business ethos, focusing on creating enterprises that benefit employees, customers, and communities. Zamani’s achievements include recognition as the “Best CEO for Diversity” and receiving the Hope Award from the Tahirih Justice Center.
