Mr. Musk is a member of the PayPal Mafia — those serial entrepreneurs who, for a time, looked like the Brat Pack of the Valley. He made a fortune as a co-founder of PayPal, the e-commerce payments system. Not so long ago, he had more than $200 million in cash. Not bad for 38.
Now Mr. Musk says his account is empty. Actually, less than empty. He says he invested his last cent in his businesses and is living off loans from his wealthy friends. He subsists, according to court filings, on $200,000 a month and still flies his private jet.
“About four months ago, I ran out of cash,” Mr. Musk acknowledged.
It was quite a revelation, one that laid bare an uncomfortable truth in the world of venture capital: high-tech entrepreneurs who look rich are often relatively cash-poor, at least next to their glittering images. Mark Zuckerberg may be a billionaire when, or if, Facebook goes public. Larry Ellison, the founder of Oracle, lives like a king. But most of his wealth is tied up in Oracle stock. Mr. Ellison lives in part off loans.
People like Mr. Musk may have redefined what it means to be rich, particularly young and rich. But somehow, many of these seemingly successful people live on the financial edge, waiting, hoping for the next deal to unlock their next fortune.
Mr. Musk told me in an interview that he put his last $35 million into Tesla, which only two years ago was on the edge of bankruptcy. That depleted virtually all his “cash reserves.” “That was my choice,” he insisted.
Faced with what he characterized as “liquidity issues,” he said: “I could have either done a rushed private stock sale or borrowed money from friends.” He chose to hang onto his stake.