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February 6, 2001

Barter Venture Capital Conference Scheduled

Another first for the barter industry is the upcoming Barter Venture Capital Conference to be held Wednesday, February 21, in Chicago.

Speakers at the conference will include barter industry veterans Harold Rice and Dean Hnilica, as well as James Berger of Northwestern University and Brian Shniderman, CEO and founder of Advise4Stock.


Bond Interest Paid With Inventory

Mark McCain, 36, is the owner of Three Lakes Winery in Three Lakes, Wisconsin. And he's using his product to move his young company forward. Selling 10-year $1,000 bonds, he is paying the yearly interest on the bonds out of his inventory--providing investors with 15 bottles of wine every year!


Network Commerce Signs Agreement With Airborne Express

Network Commerce (NASDAQ: NWKC), a technology infrastructure and services company and owner of Ubarter.com, has agreed to a joint venture with Airborne Express (NYSE:ABF), a large air express delivery carrier.

The agreement will provide Airborne with the opportunity to build their customer base by offering services to the more than 250,000 small and medium size businesses on Ubarter.com and FreeMerchant.com. Airborne will be the default shipping option for FreeMerchant, Network Commerce's online-store builder and small-business community.

Network Commerce will provide advertising and e-mail marketing services for Airborne Express as part of the agreement.


Rags To Riches Real Estate Tycoon Used Barter
To Launch $1 Billion Empire

Tamir Sapir, a 53-year-old Russian émigré, once drove a cab in New York City. Today he presides over a $1 billion Manhattan real estate empire, and has an apartment in Manhattan's Trump Towers, a sprawling mansion on Long Island, plus a villa in Acapulco.

Sapir left Russia in 1973 in a wave of Jewish emigration. His path to riches began when he saved enough money to buy a taxi medallion (license).

He then borrowed $10,000 against the medallion to invest in a small electronics store. And subsequently, in the 1980s, made millions by bartering electronics to Soviet enterprises in exchange for oil contracts that he sold to western companies. Then he took his oil proceeds and began buying Manhattan real estate.

In 1995 he paid $20 million for 2 Broadway, a 1.6 million square foot building in the Wall Street area that some said was unrentable. In 1998, he agreed to a 49-year lease on the building with New York's Metropolitan Transit Authority. (The $1.5 billion lease is now the subject of a bitter court battle between Sapir and the MTA.)


Here And There. . .

  • Follow-up on our January 30th feature about the eBay and Mail Boxes Etc. barter story... The February 5 issue of Fortune magazine has an in-depth focus on Tony De Sio, the man who created one of the best franchises of all time--Mail Boxes Etc.

    De Sio bought a 25% stake from the founders of Mail Boxes when they only had two units, and it was under his direction that they have subsequently grown to 4,200 units. One of his first moves was to establish a strategic relationship with United Parcel Services, whereby they took a 10% equity position in Mail Boxes. To land the deal De Sio put together a private placement memorandum and, laying it on the UPS CEO's desk, said, "You've got 30 days, or we're going to Federal Express."
  • The Samsung Trading Group, (a division of the Samsung Corporation, www.samsungcorp.com, of Seoul, Korea, with 1999 sales of $31 billion), has 82 overseas offices and among its many functions is the managing of the company's complex three-way trades and barter agreements.
  • Bank holding companies can, under the 1999 Gramm-Leach-Bliley Act, get into any service that's classified as "financial in nature" or "incidental to a financial activity." Already some bank holding companies have moved into insurance and securities activities. The question now, is how long will it be before a forward-looking banking concern moves into the barter marketplace.
  • George Foreman, the 52-year-old former heavyweight boxing champion, once earned $12.5 million for the 12-round decision he lost to Evander Holyfield in 1991. Yet that paycheck pales in comparison to what Foreman obtained for the use of his name in a 5-year endorsement agreement with Salton, the manufacturer of Foreman indoor grills.

    Instead of paying Foreman in cash, Salton issued 621,161 shares, valued at $36 each. And the company guaranteed that stock price, agreeing to make up the difference if the shares fell. The final tally will be due this September, but at a recent stock price Foreman will be receiving another 409,000 shares!
  • Here's a new one--the managing director of a venture capital firm is letting companies he's invested in bid for placement on his business cards! The top bid was 75˘ a card, five others paid 51˘ to 11˘ to be on the business cards. (The money raised is going to charity.)
  • U.S. government surplus goods are now available online from the General Service Administration, GSAauctions.gov.
  • The easiest money ever made has to be the trading of "naming rights," which is what the new football stadium in Denver did by agreeing with Invesco Funds (a money-management firm) to name the new stadium Invesco Field for $120 million. After the 20-year term they can do it all over again!

 



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