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SpaceX and Tesla were really possible because of the large amounts of money that Elon put into the companies, it is estimated that Elon invested $100MM into Spa

SpaceX and Tesla were really possible because of the large amounts of money that Elon put into the companies, it is estimated that Elon invested $100MM into SpaceX. his extremely impressive resume was not enough to receive the level of funding to get the company off the ground (get it?) how can a first time entrepreneur actually receive substantial investment without putting in such a large personal investment?

devfeed 13y ago
It would clearly be a different path than Elon's startups. But it's impressive that YC is willing to do the funding legwork for such an ambitious company, if they believe in it.
tlb 13y ago
Many first-time entrepreneurs have raised more than $100M. They started with small amounts and showed great results at each stage.
- phmagic 13y ago
  I think that doesn't apply to very long time horizon projects. You might not have anything to show investors as progress until 10 years down the road. You either need enough money upfront or personal money to put in along the way.
  - the_watcher 13y ago
    This is something that YC can help with, though. They have shown a willingness to be much less risk averse than the average VC, and are at least making an effort to seek out long shots that probably would have trouble raising funds for a 10 year horizon project (such as SpaceX) on their own. YC can help a non-Elon Musk get started in the right direction for some of these projects, put in some money (both through YC VC and as angels), and help introduce these teams to the right partners at the right VC's for raising the right funds at the right time. This doesn't make it a sure thing that this will lead to more Tesla/SpaceX successes, but it can only increase the odds. Bravo.
- staunch 13y ago
  Tesla would not exist if Elon Musk hadn't bet his personal fortune. He showed terrible results at first so all his investors gave up on him. Your average YC founder would not have been in a position to pony up $40M to do the Series E himself.
  - toomuchtodo 13y ago
    People usually don't realize that Tesla was days from insolvency back in 2008: http://www.autotrends.org/2008/11/17/avoiding-insolvency-tesla-motors-borrows-40-million/ http://www.autotrends.org/2008/11/17/avoiding-insolvency-tes... Elon is an all-in kind of guy, but has his hands full. More Elons please.
    - crassus 13y ago
      What are all the filthy rich people in Silicon Valley not named "Musk" doing with their money?
- dsugarman 13y ago
  I 100% agree when it comes to software, but if we are talking about long term ground breaking technology.. how can you start a spaceship company without a $100M initial investment? what results can you show at an early stage? it's an honest question and I think about this all the time. If you can solve the funding issue, I would bet a lot more people will choose the more ambitious projects. What can a spaceship company accomplish with $100k?
  - pg 13y ago
    By not starting with spaceships, but instead with something that can evolve into spaceships. Here's the first product of Boeing, which built the bottom stage of the Saturn V: http://www.boeing.com/boeing/history/boeing/bw.page http://www.boeing.com/boeing/history/boeing/bw.page
    - carpdiem 13y ago
      I feel like this is not a good comparison. Boeing took fifty years to go from the company that built that plane, to the company that helped build the Saturn V. I'm all for long time horizons, but I don't think that most startup founders envision spending fifty years on a company in order to finally, at the end of that, get to do what they wanted to do in the first place.
      - pw 13y ago
        I don't know about most startup founders, but I think YC might be okay with a fifty-year time horizon given that Sam said that they invest with an "infinite time horizon" and that needing to raise a billion dollars over the course of a company's lifetime is a "plus".
      - netcan 13y ago
        Boeing didn't take a straight path from A to B so the timescale is not all that relevant. It's just an example of how things that seem impossible from a cold start seem more possible when you think in steps. It's not step 1 - raise $250m , step 2 - build spaceship. Elon Musk seems like the counterexample because he started with so much capital and credibility. But he was very obviously thinking steps from the start. Each one risky. Build engine. Build high end car. Buildlower end cars. Maybe then build parts for other manufacturers. Most big goals are reached in steps. The more difficult and risky the goal the more steps there are and the bigger and riskier they are likely to be but they are still steps. If your goal is building spaceships you could start by doing something useful with satellites as a step 1. This could be a kickstart-able sized undertaking. https://www.google.ie/search?q=site:https://www.kickstarter.com/+satellite https://www.google.ie/search?q=site:https://www.kickstarter.... Obviously if you are trying to push the boundaries of what a cold start startup can possibly achieve, you are going to find yourself on the difficult-impossible border region but that's the point, isn't it?
deleted 13y ago
[deleted]
Crito 13y ago
Was Elon's resume impressive back in 2002 when he was starting SpaceX? That was before even Tesla, so as far as I can tell back in 2002 his resume had a BS in Economics, a BS in Physics, X.com, and Paypal. Normally that would be plenty impressive, but I don't think that is a particularly impressive resume for somebody looking to start a rocket company. The connection between Paypal and space exploration isn't exactly strong, even with an undergraduate degree in physics. I suppose he could also put "hassled Russians for a decommissioned ICBM" on his resume too though. ;)
- svenkatesh 13y ago
  He had enrolled in, and dropped out of, a PhD program for Physics at Stanford by 2002.
- mikeyouse 13y ago
  > Was Elon's resume impressive back in 2002 [..] and Paypal Paypal wasn't exactly some trivial event in his life, it IPOed in early 2002 and made him (and his investors) fabulously wealthy. It was also one of the first successful IPOs in the wake of the .com bubble bursting. Musk made ~$25M from shares that were sold in the IPO, and his remaining stake of the company (10 percent!) was worth somewhere near $150M.[1] I'd say that's a pretty impressive resume. It's a bit easier to start a rocket company when your net worth is in the 9-digit range and you just made a bunch of investors a ton of money in your first project. [1] - http://news.cnet.com/2100-1017-935360.html http://news.cnet.com/2100-1017-935360.html
- boling11 13y ago
  He also had a successful exit in Zip2 (acquired for $300mm) before Paypal.
pbreit 13y ago
But Tesla is a good example of starting reasonably. The Roadster was mostly a Lotus Elise and the batteries were off-the-shelf notebook batteries, for example.
- skybrian 13y ago
  That's oversimplifying the problem. Even if you use some common parts, it's still designing a new car. Even if you use proven battery tech, it's using it at a different scale. It's only in hindsight that it was reasonable to start a car company in Silicon Valley at all.
- mikeyouse 13y ago
  > But Tesla is a good example of starting reasonably. The Tesla Roadster was first shown to the public in July of 2006. By that time, Tesla had already raised (and spent) nearly $60M. Before they sold the first Roadster, they had raised $145M including $40M of Elon's own money. Plowing $150M into a car company before making a sale isn't remotely reasonable.
  - sillysaurus3 13y ago
    Plowing $150M into a car company before making a sale isn't remotely reasonable. Why not? After all, it resulted in Tesla.
    - snowwrestler 13y ago
      True, but Fisker took more than that, and then went bankrupt. Car companies can fail like any other startup. Tesla itself very nearly failed.
      - prawn 13y ago
        YC and VCs are used to that. Not every investment is made assuming it will be a homerun.
dchuk 13y ago
You don't need to be a first time founder to apply to YC. You also can still benefit massively from the connections YC can afford you even if you're an experienced startup founder already.

devfeed 13y ago

It would clearly be a different path than Elon's startups. But it's impressive that YC is willing to do the funding legwork for such an ambitious company, if they believe in it.

tlb 13y ago

Many first-time entrepreneurs have raised more than $100M. They started with small amounts and showed great results at each stage.

phmagic 13y ago
I think that doesn't apply to very long time horizon projects. You might not have anything to show investors as progress until 10 years down the road. You either need enough money upfront or personal money to put in along the way.
- the_watcher 13y ago
  This is something that YC can help with, though. They have shown a willingness to be much less risk averse than the average VC, and are at least making an effort to seek out long shots that probably would have trouble raising funds for a 10 year horizon project (such as SpaceX) on their own. YC can help a non-Elon Musk get started in the right direction for some of these projects, put in some money (both through YC VC and as angels), and help introduce these teams to the right partners at the right VC's for raising the right funds at the right time. This doesn't make it a sure thing that this will lead to more Tesla/SpaceX successes, but it can only increase the odds. Bravo.
staunch 13y ago
Tesla would not exist if Elon Musk hadn't bet his personal fortune. He showed terrible results at first so all his investors gave up on him. Your average YC founder would not have been in a position to pony up $40M to do the Series E himself.
- toomuchtodo 13y ago
  People usually don't realize that Tesla was days from insolvency back in 2008: http://www.autotrends.org/2008/11/17/avoiding-insolvency-tesla-motors-borrows-40-million/ http://www.autotrends.org/2008/11/17/avoiding-insolvency-tes... Elon is an all-in kind of guy, but has his hands full. More Elons please.
  - crassus 13y ago
    What are all the filthy rich people in Silicon Valley not named "Musk" doing with their money?
dsugarman 13y ago
I 100% agree when it comes to software, but if we are talking about long term ground breaking technology.. how can you start a spaceship company without a $100M initial investment? what results can you show at an early stage? it's an honest question and I think about this all the time. If you can solve the funding issue, I would bet a lot more people will choose the more ambitious projects. What can a spaceship company accomplish with $100k?
- pg 13y ago
  By not starting with spaceships, but instead with something that can evolve into spaceships. Here's the first product of Boeing, which built the bottom stage of the Saturn V: http://www.boeing.com/boeing/history/boeing/bw.page http://www.boeing.com/boeing/history/boeing/bw.page
  - carpdiem 13y ago
    I feel like this is not a good comparison. Boeing took fifty years to go from the company that built that plane, to the company that helped build the Saturn V. I'm all for long time horizons, but I don't think that most startup founders envision spending fifty years on a company in order to finally, at the end of that, get to do what they wanted to do in the first place.
    - pw 13y ago
      I don't know about most startup founders, but I think YC might be okay with a fifty-year time horizon given that Sam said that they invest with an "infinite time horizon" and that needing to raise a billion dollars over the course of a company's lifetime is a "plus".
    - netcan 13y ago
      Boeing didn't take a straight path from A to B so the timescale is not all that relevant. It's just an example of how things that seem impossible from a cold start seem more possible when you think in steps. It's not step 1 - raise $250m , step 2 - build spaceship. Elon Musk seems like the counterexample because he started with so much capital and credibility. But he was very obviously thinking steps from the start. Each one risky. Build engine. Build high end car. Buildlower end cars. Maybe then build parts for other manufacturers. Most big goals are reached in steps. The more difficult and risky the goal the more steps there are and the bigger and riskier they are likely to be but they are still steps. If your goal is building spaceships you could start by doing something useful with satellites as a step 1. This could be a kickstart-able sized undertaking. https://www.google.ie/search?q=site:https://www.kickstarter.com/+satellite https://www.google.ie/search?q=site:https://www.kickstarter.... Obviously if you are trying to push the boundaries of what a cold start startup can possibly achieve, you are going to find yourself on the difficult-impossible border region but that's the point, isn't it?

deleted 13y ago

[deleted]

Crito 13y ago

Was Elon's resume impressive back in 2002 when he was starting SpaceX? That was before even Tesla, so as far as I can tell back in 2002 his resume had a BS in Economics, a BS in Physics, X.com, and Paypal. Normally that would be plenty impressive, but I don't think that is a particularly impressive resume for somebody looking to start a rocket company. The connection between Paypal and space exploration isn't exactly strong, even with an undergraduate degree in physics. I suppose he could also put "hassled Russians for a decommissioned ICBM" on his resume too though. ;)

svenkatesh 13y ago
He had enrolled in, and dropped out of, a PhD program for Physics at Stanford by 2002.
mikeyouse 13y ago
> Was Elon's resume impressive back in 2002 [..] and Paypal Paypal wasn't exactly some trivial event in his life, it IPOed in early 2002 and made him (and his investors) fabulously wealthy. It was also one of the first successful IPOs in the wake of the .com bubble bursting. Musk made ~$25M from shares that were sold in the IPO, and his remaining stake of the company (10 percent!) was worth somewhere near $150M.[1] I'd say that's a pretty impressive resume. It's a bit easier to start a rocket company when your net worth is in the 9-digit range and you just made a bunch of investors a ton of money in your first project. [1] - http://news.cnet.com/2100-1017-935360.html http://news.cnet.com/2100-1017-935360.html
boling11 13y ago
He also had a successful exit in Zip2 (acquired for $300mm) before Paypal.

pbreit 13y ago

But Tesla is a good example of starting reasonably. The Roadster was mostly a Lotus Elise and the batteries were off-the-shelf notebook batteries, for example.

skybrian 13y ago
That's oversimplifying the problem. Even if you use some common parts, it's still designing a new car. Even if you use proven battery tech, it's using it at a different scale. It's only in hindsight that it was reasonable to start a car company in Silicon Valley at all.
mikeyouse 13y ago
> But Tesla is a good example of starting reasonably. The Tesla Roadster was first shown to the public in July of 2006. By that time, Tesla had already raised (and spent) nearly $60M. Before they sold the first Roadster, they had raised $145M including $40M of Elon's own money. Plowing $150M into a car company before making a sale isn't remotely reasonable.
- sillysaurus3 13y ago
  Plowing $150M into a car company before making a sale isn't remotely reasonable. Why not? After all, it resulted in Tesla.
  - snowwrestler 13y ago
    True, but Fisker took more than that, and then went bankrupt. Car companies can fail like any other startup. Tesla itself very nearly failed.
    - prawn 13y ago
      YC and VCs are used to that. Not every investment is made assuming it will be a homerun.

dchuk 13y ago

You don't need to be a first time founder to apply to YC. You also can still benefit massively from the connections YC can afford you even if you're an experienced startup founder already.