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Sep 19, 2016 · 27m · top-founders

EP 422: $2.6M 2015 Free Cash Flow On Luxury Car Business

Pejman Ghadimi · 12m spoken Nathan Latka · 11m spoken
0:00 / 0:00

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In this episode of 'The Top,' host Nathan Latka interviews serial entrepreneur Pejman Ghadimi, who breaks down how he generated $2.6 million in free cash flow through VIP Motoring's exotic car investment model and scaled his entrepreneurial education platform, Secret Entourage.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 48.6% of the talking time here. How this is scored →

Nathan as informed peer 3.9 Guest teaching 2.9 Guest disagreement 2.1 Nathan pushing back 3.9
05100:0010:0020:001:36–3:56 · Nathan as informed peer 3/10 Introducing Pejman Ghadimi and VIP Motoring Overview Nathan introduces Pejman and asks where most of his money comes from. Pejman explains VIP Motoring's luxury car investment concierge model and how they guarantee downside protection.3:56–8:04 · Nathan as informed peer 5/10 VIP Motoring Financials and Deal Example Nathan presses for specific deal economics and questions Pejman's use of the word bribery to describe allocation fees. Pejman clarifies the top-line revenue ($37M) and cash flow splits with his operator.8:10–12:37 · Nathan as informed peer 5/10 Mechanics of Exotic Car Investing and Resale Pejman schools Nathan on why investors pay $2M for cars they never drive, comparing exotic cars to equity investments. Nathan presses on profit-sharing math and why Pejman isn't a billionaire yet.12:37–16:43 · Nathan as informed peer 6/10 Overview and Business Model of Secret Entourage Pejman breaks down Secret Entourage's business model and book sales. Nathan quickly calculates discrepancy between reported user growth and revenue, prompting Pejman to explain discounting.16:43–21:10 · Nathan as informed peer 6/10 Secret Entourage Operations, Traffic, and Community Nathan directly challenges Pejman's claim that contributors write for free just because they believe in the movement. Pejman pushes back firmly that not everything in business is strictly about money.21:11–23:15 · Nathan as informed peer 0/10 Sponsor Segment: Toptal Freelance Developers Host mid-roll sponsor monologue advertising Toptal and HostGator.23:15–25:28 · Nathan as informed peer 2/10 The Famous Five Rapid-Fire Questions Nathan walks Pejman through the rapid-fire Famous Five questions, uncovering his early career as an 18-year-old bank manager who was eventually fired for cockiness.1:36–3:56 · Guest teaching 3/10 Introducing Pejman Ghadimi and VIP Motoring Overview Nathan introduces Pejman and asks where most of his money comes from. Pejman explains VIP Motoring's luxury car investment concierge model and how they guarantee downside protection.3:56–8:04 · Guest teaching 3/10 VIP Motoring Financials and Deal Example Nathan presses for specific deal economics and questions Pejman's use of the word bribery to describe allocation fees. Pejman clarifies the top-line revenue ($37M) and cash flow splits with his operator.8:10–12:37 · Guest teaching 6/10 Mechanics of Exotic Car Investing and Resale Pejman schools Nathan on why investors pay $2M for cars they never drive, comparing exotic cars to equity investments. Nathan presses on profit-sharing math and why Pejman isn't a billionaire yet.12:37–16:43 · Guest teaching 2/10 Overview and Business Model of Secret Entourage Pejman breaks down Secret Entourage's business model and book sales. Nathan quickly calculates discrepancy between reported user growth and revenue, prompting Pejman to explain discounting.16:43–21:10 · Guest teaching 4/10 Secret Entourage Operations, Traffic, and Community Nathan directly challenges Pejman's claim that contributors write for free just because they believe in the movement. Pejman pushes back firmly that not everything in business is strictly about money.21:11–23:15 · Guest teaching 0/10 Sponsor Segment: Toptal Freelance Developers Host mid-roll sponsor monologue advertising Toptal and HostGator.23:15–25:28 · Guest teaching 2/10 The Famous Five Rapid-Fire Questions Nathan walks Pejman through the rapid-fire Famous Five questions, uncovering his early career as an 18-year-old bank manager who was eventually fired for cockiness.1:36–3:56 · Guest disagreement 1/10 Introducing Pejman Ghadimi and VIP Motoring Overview Nathan introduces Pejman and asks where most of his money comes from. Pejman explains VIP Motoring's luxury car investment concierge model and how they guarantee downside protection.3:56–8:04 · Guest disagreement 2/10 VIP Motoring Financials and Deal Example Nathan presses for specific deal economics and questions Pejman's use of the word bribery to describe allocation fees. Pejman clarifies the top-line revenue ($37M) and cash flow splits with his operator.8:10–12:37 · Guest disagreement 3/10 Mechanics of Exotic Car Investing and Resale Pejman schools Nathan on why investors pay $2M for cars they never drive, comparing exotic cars to equity investments. Nathan presses on profit-sharing math and why Pejman isn't a billionaire yet.12:37–16:43 · Guest disagreement 2/10 Overview and Business Model of Secret Entourage Pejman breaks down Secret Entourage's business model and book sales. Nathan quickly calculates discrepancy between reported user growth and revenue, prompting Pejman to explain discounting.16:43–21:10 · Guest disagreement 6/10 Secret Entourage Operations, Traffic, and Community Nathan directly challenges Pejman's claim that contributors write for free just because they believe in the movement. Pejman pushes back firmly that not everything in business is strictly about money.21:11–23:15 · Guest disagreement 0/10 Sponsor Segment: Toptal Freelance Developers Host mid-roll sponsor monologue advertising Toptal and HostGator.23:15–25:28 · Guest disagreement 1/10 The Famous Five Rapid-Fire Questions Nathan walks Pejman through the rapid-fire Famous Five questions, uncovering his early career as an 18-year-old bank manager who was eventually fired for cockiness.1:36–3:56 · Nathan pushing back 3/10 Introducing Pejman Ghadimi and VIP Motoring Overview Nathan introduces Pejman and asks where most of his money comes from. Pejman explains VIP Motoring's luxury car investment concierge model and how they guarantee downside protection.3:56–8:04 · Nathan pushing back 5/10 VIP Motoring Financials and Deal Example Nathan presses for specific deal economics and questions Pejman's use of the word bribery to describe allocation fees. Pejman clarifies the top-line revenue ($37M) and cash flow splits with his operator.8:10–12:37 · Nathan pushing back 6/10 Mechanics of Exotic Car Investing and Resale Pejman schools Nathan on why investors pay $2M for cars they never drive, comparing exotic cars to equity investments. Nathan presses on profit-sharing math and why Pejman isn't a billionaire yet.12:37–16:43 · Nathan pushing back 4/10 Overview and Business Model of Secret Entourage Pejman breaks down Secret Entourage's business model and book sales. Nathan quickly calculates discrepancy between reported user growth and revenue, prompting Pejman to explain discounting.16:43–21:10 · Nathan pushing back 7/10 Secret Entourage Operations, Traffic, and Community Nathan directly challenges Pejman's claim that contributors write for free just because they believe in the movement. Pejman pushes back firmly that not everything in business is strictly about money.21:11–23:15 · Nathan pushing back 0/10 Sponsor Segment: Toptal Freelance Developers Host mid-roll sponsor monologue advertising Toptal and HostGator.23:15–25:28 · Nathan pushing back 2/10 The Famous Five Rapid-Fire Questions Nathan walks Pejman through the rapid-fire Famous Five questions, uncovering his early career as an 18-year-old bank manager who was eventually fired for cockiness.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 72.3% · guest 27.7%0:00 · Nathan 72.3% · guest 27.7%3:00 · Nathan 26.8% · guest 73.2%3:00 · Nathan 26.8% · guest 73.2%6:00 · Nathan 49.5% · guest 50.5%6:00 · Nathan 49.5% · guest 50.5%9:00 · Nathan 30.3% · guest 69.7%9:00 · Nathan 30.3% · guest 69.7%12:00 · Nathan 28.3% · guest 71.7%12:00 · Nathan 28.3% · guest 71.7%15:00 · Nathan 39.6% · guest 60.4%15:00 · Nathan 39.6% · guest 60.4%18:00 · Nathan 32.1% · guest 67.9%18:00 · Nathan 32.1% · guest 67.9%21:00 · Nathan 80.8% · guest 19.2%21:00 · Nathan 80.8% · guest 19.2%24:00 · Nathan 76% · guest 24%24:00 · Nathan 76% · guest 24%27:00 · Nathan 0% · guest 0%27:00 · Nathan 0% · guest 0%
Sharpest disagreement ▶ 19:07 Not everything is about money, bro

Pejman rejects Nathan's cynical framing about why contributors write for his site, countering that affluent entrepreneurs do not solely operate for short-term cash.

 Hardest push from Nathan ▶ 19:37 Nathan calls out vague movement talk

Nathan refuses to accept Pejman's claim of people joining a movement, stating his audience rolls their eyes at such cliches and demanding the real incentive structure.

 Biggest teaching moment ▶ 9:04 Cars as paper stock investments

Pejman educates Nathan on why high-end exotic cars cannot be driven without losing value and explains how exotic car investment functions identically to buying shares of stock.

 Nathan holds their own ▶ 17:18 Nathan checks Alexa rank against traffic claims

Nathan compares Pejman's reported 6,000 daily unique visitors against his own site metrics and Pejman's Alexa rank to question whether the numbers reflect uniques or raw page views.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Pejman Ghadimi and VIP Motoring Overview 3313 Nathan introduces Pejman and asks where most of his money comes from. Pejman explains VIP Motoring's luxury car investment concierge model and how they guarantee downside protection.
VIP Motoring Financials and Deal Example 5325 Nathan presses for specific deal economics and questions Pejman's use of the word bribery to describe allocation fees. Pejman clarifies the top-line revenue ($37M) and cash flow splits with his operator.
Mechanics of Exotic Car Investing and Resale 5636 Pejman schools Nathan on why investors pay $2M for cars they never drive, comparing exotic cars to equity investments. Nathan presses on profit-sharing math and why Pejman isn't a billionaire yet.
Overview and Business Model of Secret Entourage 6224 Pejman breaks down Secret Entourage's business model and book sales. Nathan quickly calculates discrepancy between reported user growth and revenue, prompting Pejman to explain discounting.
Secret Entourage Operations, Traffic, and Community 6467 Nathan directly challenges Pejman's claim that contributors write for free just because they believe in the movement. Pejman pushes back firmly that not everything in business is strictly about money.
Sponsor Segment: Toptal Freelance Developers 0000 Host mid-roll sponsor monologue advertising Toptal and HostGator.
The Famous Five Rapid-Fire Questions 2212 Nathan walks Pejman through the rapid-fire Famous Five questions, uncovering his early career as an 18-year-old bank manager who was eventually fired for cockiness.

Statements from this episode (11)

Assertion Supported
Ghadimi claims VIP Motoring was first to enable exotic car investing
“VIP motoring is a luxury concierge service that focuses on helping people invest in high-end exotic cars and extremely collectible cars, and so that's been the case since we were the first ever to allow this”
Pejman Ghadimi Sep 19, 2016 ▶ 2:15
Disclosure
Ghadimi: VIP Motoring guarantees massive resale profits on exotic cars within a year
“We allow people to come in and purchase, let's say, a car that we're buying for half a million. We'll let them purchase it for 700,000, and we'll guarantee that we'll resell it somewhere around 1.2 million in the next year or so.”
Pejman Ghadimi Sep 19, 2016 ▶ 3:08
Assertion Not checkable as stated
Ghadimi: VIP Motoring investors face zero risk to principal during market downturns
“We also have guarantees in place in case, let's say the market takes a tank. We can always back out and get out of certain deals so that the actual consumer is never actually impacted by this. So their principle is ultimately safe.”
Pejman Ghadimi Sep 19, 2016 ▶ 3:36
Assertion Not checkable as stated
Ghadimi: VIP Motoring made $500k upfront flipping a Ferrari LaFerrari allocation
“Like we had three allocations, which is unheard of. We had three of such cars at sticker between 1.3 and 1.5. We took, let's say, let's use one of them as an example, 1.5 buying price. We went ahead and actually got someone to invest in that car at two million…”
Pejman Ghadimi Sep 19, 2016 ▶ 4:07
Disclosure
Ghadimi: We paid a €70,000 bribe to divert a Ferrari 488 allocation
“One of the things we did is the car was heading to Germany. So we have to bribe someone upwards of 70,000 euros. Just to allow the car to change routes and ultimately tell the client that they weren't going to get a car because of the mistake in exchange getti…”
Pejman Ghadimi Sep 19, 2016 ▶ 5:56
Disclosure
Ghadimi: VIP Motoring maintains an on-site private circuit to test vehicles
“Well, we have our own warehouse, and in the back of it, we have our own circuit, meaning we can drive the cars for the sake of keeping the tires well, and actually maintaining anything we need, test driving, doing any types of actual maintenance to the cars th…”
Pejman Ghadimi Sep 19, 2016 ▶ 9:58
Insight
Ghadimi: Exotic car flipping cannot scale indefinitely due to scarce allocations
“There's only so many cars you can do this with, and there's only so many allocations you can take. The other disbenefit is also that not only you can do this on a limited basis, but it also has costs, meaning that actually finding people, et cetera, actually t…”
Pejman Ghadimi Sep 19, 2016 ▶ 11:09
Assertion Not checkable as stated
Ghadimi: 'Third Circle Theory' Book Has Sold Over 220,000 Copies
“Currently over 220,000 copies.”
Pejman Ghadimi Sep 19, 2016 ▶ 13:54
Assertion Not checkable as stated
Ghadimi: Secret Entourage grew revenue from $1.5M to over $4M
“1.5 1000002.3. And then we last year we crossed four.”
Pejman Ghadimi Sep 19, 2016 ▶ 14:39
Disclosure
Ghadimi: Secret Entourage generates over $4M with just four core team members
“On that company alone, we only have five, like, four team members. A lot of the other ones are really contractors, people that have worked with us for years, but not employees.”
Pejman Ghadimi Sep 19, 2016 ▶ 18:35
Disclosure
Ghadimi: Secret Entourage Does Not Pay Any Academy Teachers
“No, we don't pay any of our teachers.”
Pejman Ghadimi Sep 19, 2016 ▶ 18:57
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