Ask entrepreneur Gavin Solomon about his role in Prime Minister Malcolm Turnbull’s seminal technology deal in the 1990s and you will gain a rare insight into the former Goldman Sachs banker’s generous side.
Solomon’s law firm, Solomon Garland & Partners, handled the legal work for the $120 million sale of a stake in Ozemail by Turnbull, Sean Howard and Trevor Kennedy to an American multinational.
When the legal work was done, Solomon sent Turnbull a large bill. The following day he received a call from Turnbull. Fearing the worst, he braced for a verbal battering but instead was told: “Gav, this is not enough. We will pay you more.”
Solomon says Turnbull is the only client who ever asked for an increase in fees.
Now, Solomon is the one attracting the interest of global corporations keen to take a stake in his tech company: PrimaryMarkets, which is a technology platform for trading unlisted securities.
It has all the qualities required for fintech success. Its services are not bound by national borders, its customers are a mix of retail and sophisticated investors, it is not burdened by excessive capital requirements policed by overzealous global regulators, it can operate at scale and its relatively small fixed cost base provides operating leverage as volumes grow.Since its launch, PrimaryMarkets has been used to sell a range of securities, including shares in privately owned companies, units in unlisted property trusts and unlisted share options.
Unique users on the site cracked the 10,000 mark in July with about 40 per cent of the devices accessing the site overseas. Judging from the site’s web traffic there are potential or existing users in the United States, Russia, Britain, China, Hong Kong and India, according to Google Analytics.
The smart money has already twigged to the good sense in having a platform for unloading stock in companies that are not listed on an exchange. The benefits apply to those using the site and those who have invested in it.
An example of the stock being traded on the site is the sale of about $10 million of shares in Tyro Payments, the EFTPOS payments company taking on the big four banks.
Tyro, founded by German tech entrepreneur Jost Stollmann and backed by Atlassian co-founder Mike Cannon-Brookes, had some shareholders who wanted to cash out. The sale confirmed the company’s valuation of $380 million.
Investors in PrimaryMarkets include fund manager John Murray, stockbrokers James Green, Peter Gray and Chris Macdonald, Clearview chief executive Simon Swanson and PrimaryMarkets directors Peter Curry and Brett Spork.
Another shareholder is Philip Reicherz, who many years ago co-founded a US platform for trading unlisted securities called SecondMarket, which is famous for trading $US500 million of shares in Facebook before its IPO.
Solomon first showed his maverick streak back in May 1992 when he launched a successful campaign to unseat the board of Westpac Banking Corp.
“The Westpac board treated their shareholders as fools, and lost market confidence by their negligence and ineptitude when they failed to accept responsibility for their errors until they were confronted with a full board spill,” says Solomon.
The maverick mindset
Solomon’s career as an entrepreneur in media, property and mining began in the same year as the Westpac imbroglio.
He and his late brother, Greg, founded East Coast Pay Television, which they sold to Austar/Foxtel for $140 million in 1998. At one stage, East Coast Pay Television owned one of only two satellite licences (A licence) for Australia, having beaten Rupert Murdoch and Kerry Packer to the punch.
His purple patch in mining was in 2014 when he sold Endocoal to a Chinese state owned enterprise for $75 million and Carabella to a Chinese billionaire for $80 million. He was a founding shareholder in both companies.
When asked the secret of being an entrepreneur, he says: “I don’t believe one ever learns to be an entrepreneur. Rather it’s a career path that you are more content to travel instead of trying to climb the corporate tree.”
During his career, Solomon has had three mentors: his father, his brother Greg and an Indian prince who taught him the “747 rule of business: that you put as much work into selling a 747 as you do selling a Morris Minor – and which one brings you more success?”AFR BOSS 5th October 2016