Odd ... why put your own money at risk when you have access to unlimited blank checks? Some kind of weird personal asset defense play?

I have no idea why people take outside money. If you can't afford to build it, start smaller, get rich, go bigger. What is the purpose of personal capital if not to bet on yourself?

> I have no idea why people take outside money. If you can't afford to build it, start smaller, get rich, go bigger

1. To diversify their finances. Going all in means every bet, if it fails, could be your last. (Less applicable for someone with Elon's name recognition.)

2. Some ideas don't scale down. Building a big rocket is a different game from building a small one. The lessons from the latter will apply roughly, at best, to the former. Same with tunnels.

3. To get intellectual and political buy-in. When people invest in something, they take ownership--financially and emotionally. Having shareholders who you can deputies to fight your battles can sometimes beat a hired hand.

I think your second point is the most valid and hard to argue counter argument. I agree, there are things that simply require more capital than people have in their bank. I disagree that diversifying is virtuous unless there is a good reason to. Make the government your customer and your work will always be legal, not so for investors (see: countries "cleaning up" their portfolios, people still use gas though).

You take funding because you think it'll increase your personal rate of wealth increase.

Loans are the simplest to understand -- it's leverage. If you think you can double your money in a few years with a business plan, and that opportunity scales passably well to more money than you have in your bank account, you can take out a loan. To use your language, leverage is just "betting on yourself" even harder.

Taking on investors is different in that you can't ruin yourself doing it, but similar in that it increases your resources in a way that you hope will more than pay off over time against the cost.

You absolutely can ruin yourself doing it. The more outside capital you have, the larger the expectations of eventual returns are. If I take $100M in risk capital, I have to surpass $250M in returns or it was a failure. Simply doubling the money, even if done in mere years, is a failure. So from that perspective, investor money is actually worse than loans. I agree that loans are good for leverage, and banks are much less likely than investors to change the terms because they are senior and covered somewhat from downside. Investor money very much can ruin a perfectly good business with outsized expectations right when it starts working.

Another huge reason is to prove concept and make sure you're not fooling yourself. If you can get others to put in large amounts, it's an (imperfect) indicator of a kind of traction.

Musk probably doesn't feel like he needs that validation, so the main reasons to take outside money would be leverage and diversification. The downside is some loss of control.

Nobody else understands it or believes in it like you do.

Customers are validation, not investors. It is way, way easier to dupe an investor than a customer.

Total opposite way of how Musk thinks. He despises this attitude. He has said multiple times, if you won't risk your own money, what right do you have to risk someone else's? To him that's unethical. I agree.

Good point, he is reckless!

I'd say someone like Musk can be perceived to get caught up in their vision of the future so much that they are out of touch with the broader market and trends; however congestion is of the top issues of the 2nd largest city in the US.

Boring under LA to relieve congestion creates a MASSIVE opportunity that, when refined, can be deployed into other markets and eventually used in space. It's a genius move.

Musk is a definite bad ass.

I believe this has always been Elon Musk's strategy. Double down on his own projects. He's been pretty successful at it, as yet.

My first thought was that this might be to protect Musk's assets if Tesla/SolarCity etc run out of cash, go belly up etc. Parking his wealth in yet another early stage entity would make it harder to go after if structured cleverly?

The point of a limit corporation is that the shareholders are not personally liable for the company's debts. There are exceptions (usually related to the shareholders using corporate money for their personal purposes), but they're rare, and in any case I don't think this would protect him, since the shares in the Boring Company are themselves assets.

Part of what ruins companies you used to like is the money people get board memberships and have ideas about how fast they should be able to cart away the wheelbarrows full of cash.

Control, it's less work, and Elon is so successful that he doesn't need to worry about the signaling risk of putting in his own money.

Maybe he sees a large upside, and enjoys control.

He didn't let friends invest in SpaceX early on because he didn't want to lose their money. Perhaps this is similar.

I genuinely don't understand why this comment was down-voted.

That’s not really true. The stock is flat over the past year. To be a musk investor now, you have to accept that you’re late to the party, and enjoy buying into rich valuations with a lot of hype baked in.

You’re talking about buying puts, which is different from shorting the stock. If you short a stock that stays flat, you’re out your borrowing costs but nothing more.

Also you could have sold long dated call spreads for most of the year - effectively shorting the stock with some profit to show for it.

Edit: you’re also more likely to have lost money buying Tesla over the past year vs shorting it, so it really hasn’t been “expensive” to short it.

You seem to be confused between short selling and puts.