Elon Musk has no difficulty raising capital at this stage. And being the richest person in the world, he could easily fund a startup on his own, if he wanted. But this week, the billionaire CEO of You’re here And EspaceX shared his thoughts on why he seeks investors for his various businesses, even when he doesn’t necessarily need them.
During a space conversation moderated by Cathie Wood, CEO of ARK Investment Management, Musk was asked why he would bother with outside shareholders given that it might be easier without them to take risks without answering to anyone.
“Well, I take a lot of risks anyway,” he replied. But, he added: “Every investor you add is an ally. It’s good to have more allies.
One reason, he says, is that it “demonstrates that I have no illusions” about the valuation of his companies. “If others are willing to invest at a particular value, then I’m not the only one to decide… it’s sort of an external assessment of the value of the company. »
Additionally, he added, he wants to “enable liquidity” for employees who received stock options. Musk, who fiercely resisted unionization efforts at Tesla, said its electric vehicle maker “may have created more employee millionaires than any company in history,” adding that it’s important to give workers stock “so that the incentive is aligned with business results.”
United Auto Workers said last month, after winning new contracts with all three Detroit automakers, it would make an unprecedented effort to organize the non-union auto sector in the United States, including Tesla. Unions in Sweden are give the car manufacturer headachesAlso.
Musk also owns Boring Company, Neuralink and X (formerly Twitter), all of which have attracted significant investments from major players. Its xAI, which takes on OpenAI with its own AI chatbot Grok, is seeking to raise up to $1 billion in stock investments.
While every company faces the risks and controversies typical of a Musk-led company, drop in advertising revenue and the Boring Company with projects that fail– the billionaire said that at this point he could finance “just about anything” through equity or debt.
“In all my businesses, over the years, I have never lost money to an investor even once,” he said. “That’s now over 100 rounds of funding…That’s a pretty good batting average.” Obviously, when you have treated capital well, it in turn treats you well.
He noted: “Of course I can’t stop people from selling when they shouldn’t sell, but I’ve never led them to a bad result. »
However, he acknowledged: “I have to make sure that this record remains intact, and not be complacent or entitled. »
