How a timely help lead to a formation of multi billion dollar company #PAYTM Here’s the story
It was the year 2004. Vijay was struggling with his company One97 Communications,it was difficult for him to pay salaries for his employees and cost of business operations was also high
It was the year 2004. Vijay was struggling with his company One97 Communications,it was difficult for him to pay salaries for his employees and cost of business operations was also high
So some days he would do training or consultancy work to make money. He would go to companies and teach their employees about the InternetHe was paid Rs.1000 for a day of training. For some of the companies, he would setup a website & email while his team ran the One97 operations
The money Vijay earned this way kept One97 going. While on the training-consultancy circuit, Vijay ran into Piuyush Agrawal, whose Polar software needed help with its technology. Vijay’s work took Agrawal’s company from no profits to handsome profits.
“Why don’t you become the CEO of my Company”? asked Agrawal.
“I can’t, said Vijay. ‘I have my own company to run’.
“I can’t, said Vijay. ‘I have my own company to run’.
Later, due to cash crunch and pressure from Vijay’s parents to get him married, he decided to work as a Part Time CEO for Polar Software, Piyush Agrawal’s company for just Rs.30,000 per month.
For Piyush, it was a stellar deal.
For Piyush, it was a stellar deal.
He was getting a CEO who had brought his company into profits and that too for just Rs.30,000 per month. They both agreed on the deal and Vijay was working as part time CEO at Piyush’s company Polar software.
One day, Piyush Agrawal asked Vijay what his company did and why it needed so much of his time. Vijay explained his business in detail.
‘How can I help?’, asked Piyush.
‘Give me a loan of Rs.8 lakh’, said Vijay. ‘That is the amount of loan i need to repay’.
‘How can I help?’, asked Piyush.
‘Give me a loan of Rs.8 lakh’, said Vijay. ‘That is the amount of loan i need to repay’.
Piyush agreed to give him Rs. 8 lakh but not to repay the loan, but instead Piyush asked Vijay to Invest that Rs.8 lakh into his company One97 communication and also offered him office space.
In return, Piyush got a 40 percent stake in One97
In return, Piyush got a 40 percent stake in One97
That little timely help Piyush did, and that too instead of just repaying the debt, the decision to invest in the company has completely turn around the situation of One97.
PayTM owned by One97 communication is a 16 billion dollar company now
PayTM owned by One97 communication is a 16 billion dollar company now
the mere 8 lakh investment for 40% stake by Piyush is worth billions now. Unfortunately, Piyush sold most of his stake at the early stage for just 87 crores.
The high current valuation of PayTM makes some people question Vijay’s wisdom in giving away 40 % stake for just Rs. 8 lakh and some office space. They forget that the value of money depends on the need it serves.
Had Piyush’s Rs. 8 lakh not come in at the time it did, One97 may have shut down and there would be no PayTM today. I came to know about this story from the book The tip of the iceberg. A must read book for all wantrepreneurs.
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