SpaceX and Tesla, were about to met bankruptcy, until Gwynne Shotwell came to the rescue.
Between 2007 and 2009, the world economy was gripped by a financial crisis that threatened the existence of so many individuals and corporate bodies.
Everything is interconnected within a country’s economy, and they are also linked to the economies of other countries and thus, this deadly combination wipes out the savings of people and corporations alike, leading them to financial ruin and bankruptcy.
With this backdrop, we come to Elon Musk and his time managing both SpaceX and Tesla in the middle of the recession.
Musk's 200 million from the sale of PayPal had pretty much run dry, and the economy went to hell, so no new investors wanted to fund either company, nor SpaceX or Tesla.
“I could either pick SpaceX or Tesla or split the money I had left between them," Musk said.
One of the key reasons that Tesla was able to stay alive was because SpaceX was in a better financial condition, and Musk was able to leverage this fact to secure Tesla's finances.
Her deal-making skills extended to negotiating the big-ticket contracts with NASA that kept SpaceX alive during its leanest years, including a $278 million contract in August 2006 to begin work on vehicles that could ferry supplies to the ISS.
Musk reached out through some back channels in Washington and found out that SpaceX might even be a front-runner for the deal so he began doing everything in his power to assure people that the company could meet the challenge of getting a capsule to the ISS.
As for Tesla, Musk had to go to his existing investors and ask them to provide for another round of funding that needed to close by Christmas Eve to avoid bankruptcy.
He took out a loan from SpaceX, which NASA approved, and earmarked the money for Tesla.
Musk gathered together $20 million, and asked Tesla's existing investors, since no new investors materialized, to match that figure.
Musk managed to avoid what he saw as a potential trap which would allow VantagePoint to move in after bankruptcy to remove Musk as CEO and emerge as the owners of Tesla.
The tricky part of this strategy was that investors who wanted to help Tesla were put in a bind because venture capital firms are not structured to do debt deals, and convincing their backers to alter their normal rules of engagement for a company that could very well go bankrupt in a matter of days would be a very tough thing to ask for.
Musk ultimately put in $12 million, and the investment firms put up the rest, saving Tesla.
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