Self-Funded Ambition: Elon Musk’s Path of Personal Reinvestment.
“I always invest my own money in the companies that I create. I don’t believe in the whole thing of just using other people’s money. I don’t think that’s right. I’m not going to ask other people to invest in something if I’m not prepared to do so myself.“ ~Elon Musk
When Elon started Zip2 with his younger brother Kimbal he was so hard up for money they worked and slept in the office, because it was cheaper than an apartment, and they could not afford both.
Elon and Kimbal only had one computer so during the day it was used as a server for Zip2, and Elon would code during the night, every night.
Elon is one year older than Kimbal and “Team Musk” proved to be an awesome duo.
Zip2 was acquired by Compaq for $307,000,000. Elon received $22 million and Kimbal received $15 million for their shares of the company when Elon was 27 years-old and Kimbal was 26.
After becoming a multi-millionaire Elon could have easily retired and lived the rest of his life relaxing on a beach…but laziness has never been Elon’s style.
Elon took half of his money and put it into an online financial services company he launched, called X.com.
This is why Elon became the largest shareholder when X.com merged with PayPal. Elon brought the most to the table.
In large part because of the $12,000,000 Elon reinvested into his success with PayPal they were able to offer $20 for each new user and this turbo-boosted new user growth and helped PayPal achieve 100,000 users within their first active month.
After the new user bonus was removed people continued to join PayPal for many reasons because it was – and still is – a very robust online payment and financial solution.
At first Elon and the PayPal team built out a large suite of solutions to solve all financial services desired by customers. It turned out email payments intrigued investors the most so they focused on that innovation and the business grew at an amazing pace, often many thousands of new users per day.
In October 2002 when eBay acquired PayPal the acquisition was for $1.5 Billion dollars and of this amount Elon received $180 Million.
In 2020 PayPal Elon bought back his x.com domain, which was part of the acquisition deal with eBay.
Of the $180,000,000 Elon had after selling PayPal he ended up investing all of that money into SpaceX, Tesla, and Solar City.
“My proceeds from PayPal were $180m. I put $100m in SpaceX, $70m in Tesla and $10m in Solar City. I had to borrow money for rent.”
And though it certainly seemed very risky at the time reinvesting everything in his success the effort has definitely paid off. If Elon had chosen to quit rather than risk it all he would certainly not be one of the wealthiest humans alive today and the world would not be as awesome of a place.
SpaceX has revolutionized the rocket industry by making rockets reusable. They first achieved a successful landing and recovery of a first stage rocket booster in December 2015.
In November 2016 Tesla acquired Solar City, which was then the largest provider of solar rooftop panels.
Tesla has been revolutionizing the auto industry and energy market since Elon Musk became involved with the new company in 2004.
Since then Tesla has won the highest safety honor from the Insurance Institute for Highway Safety.
With ceaseless innovation they have successfully shifted the entire car market towards electrification and emerged as the market leader. In 2020 Tesla became the most valuable car company in the world.
And on January 7th, 2021 Elon Musk surpassed Jeff Bezos and officially became the wealthiest man alive.