@StartupArchive_: Elon Musk on raising capital: “You have to show investors that you’re all in” “Tesla almost died in 2008,” Elon explain…

Elon Musk on raising capital: “You have to show investors that you’re all in” “Tesla almost died in 2008,” Elon explains. “The recession was particularly difficult for car companies, and in the summer of 2008 we had to raise a big funding round. But because of the collapse in the financial system, that funding round didn’t happen and we had to piece together money to keep the company going from myself and existing investors. We were able to complete a financing round that was just barely enough to keep the company going, and we closed it on the last hour of the last day that it was possible to do so. It was Christmas Eve 2008 at 6pm . . . and we would have run out of money a few days after Christmas.” Elon continues: “So while things are going really well these days, I think it’s always important to remember that when you’re creating a company, there are very dark times and it’s about getting through those dark times. That’s the difference between success and failure.” He offers the following advice to aspiring founders: “A company is a group of people gathered together to create a product or service. That’s really all a company is. So you have to really believe in what you’re creating and know in your heart and mind that this is something that matters and that the world ought to have.” Believing whole-heartedly in what your building is especially important for raising capital, Elon argues: “I think it’s important to show investors that you’re all in. For example with Tesla, the fact that I invested all the money I had and was all in — I literally had to borrow money from friends to pay rent in 2008 — made a huge difference to investors and convinced them to invest in Tesla at the same time that GM and Chrysler were going bankrupt. I think you have to show them that you really care, that you’ve got skin in the game, and that you’ve given it everything you’ve got. Then the other people at the company will follow suit, as will investors. I did that at both SpaceX and Tesla and think that’s really fundamental.” Elon also urges founders to only hire people who are passionate about what you’re building: “When you hire people, what you’re really trying to do is convince people to join you in the endeavor. You should hire people who are also passionate about what you’re doing . . . they need to really care about what they’re doing. Then they will stay during the dark times.” Source: @MTJobsSummit (Nov 2013)