Like many highly valued startups, SpaceX sometimes allows his employees to retire some of their shares by selling to external investors authorized by the company.
TechCrunch has taken a look at an internal SpaceX document regarding the May 2022 public offering. Musk published in X Last month, SpaceX held such sales for employees approximately every 6 months.
These documents offer interesting information about the investors allowed to buy these secondary stocks and the good deals they get.
In this offering, investors paid $70 per share to employees, the document shows. This is a huge bargain compared to the share prices investors pay when they invest in primary rounds, where the company sells the shares directly to raise capital.
During the main sale in 2022, the shares sold for $270.00. (SpaceX has not sold shares in a primary round at a price of $70 since its Series G sold for $77.46 per share, the documents say. That was in 2015, Pitchbook says.)
Of course, the main reason for the gigantic price discount is that employees own common stock and investors who buy in primary rounds typically purchase preferred stock that entitles them to dividends and liquidation preferences. They are the first to recoup their investment if the company is ever sold.
In fact, this document reveals that starting in 2022, if SpaceX were sold, the first $6.67 billion would be owed to preferred shareholders. Since then, the company has increased another 750 million dollars, so the sum paid first to investors should probably increase by at least that amount. If SpaceX were to actually reach its current astronomical valuation of $137 billion, these liquidation preferences (paying investors first) won’t be an issue for employees or other common stock shareholders. But if the company one day holds a liquidation sale for less than $7 billion, common shareholders would get nothing.
In terms of dividends, in 2019, internal documents seen by TechCrunch said SpaceX never paid any. But if its board of directors wanted to declare dividends, they would be paid in fixed amounts based on when investors bought shares. Those amounts range from a few cents per share for shares purchased in their earliest, cheapest rounds, to more than $10 per share for those purchased in later, most expensive rounds.
For employees, the news about their actions in 2022 was especially good. In February 2022, SpaceX completed a 10-for-1 stock split of its Class A, B and C common stock. The preferred stock was not split. The documents do not make clear what the differences are between the different classes of common shares. In public companies, different classes often have different voting rights. For example, a founder-retained class of stock might have 10 votes per share, allowing founders to retain control of their companies while selling shares and cashing out.
In this case, it is unclear when, if ever, SpaceX will go public. Secondary sales like this remain one of the only ways for employees to sell their shares.
Other good news for employees in this sale was that the price of $70 per share was an improvement over the previous offer of $56 when adjusting for the stock split. Bloomberg reported at the time. AND, Bloomberg also reported last month that the next public offering could reach between $108 and $110 each.
Which investors had to buy?
One of the most interesting revelations of these documents was that only a handful of investors were named authorized buyers. And most of them were in SpaceX’s orbit, so to speak, meaning the investors are vocal supporters of SpaceX founder Elon Musk or have had other historically close ties.
They were:
Andreessen Horowitz (a16z) was authorized to purchase nearly 4.3 million shares for nearly $300 million. Interestingly, a16z is not a long-time major historical investor in SpaceX, but he managed to get onto its cap table in a big way in the company’s business. Raising $250 million in August 2022. according to Pitchbook. He also became one of the lead investors in SpaceX’s $750 million round, valuing it at $137 billion in 2023. CNBC reported.
The company’s co-founder, Marc Andreessen, has known Musk for decades, having worked in the same circles of Silicon Valley tech billionaires. In recent years, he has become a defender of Musk, expressing admiration for the SpaceX, Tesla and X CEO in all sorts of ways, from how Musk uses his money to continue launching new companies to applaud Musk’s perseverance. Andreessen even publicly debated billionaire and rival VC Vinod Khosla (OpenAI backer) about X (owned by Musk) after Khosla praised OpenAI. shortly after Musk sued OpenAI. The debate caught Musk’s attention.
Aliya Capital Partners is partnered with Aliya Growth Fund, which was authorized to purchase just over 1.4 million shares for nearly $100 million. Aliya is a family office for the rich in Miami that says SpaceX is one of its largest holdings. Aliya, who has stakes in many prized startups like Figure AI, Impossible Foods, Anduril, notably contributed $360 million when Musk bought Twitter in 2022 for $44 billion. Reuters reported. Even after Musk immediately removed the Twitter workforce and His management style made others (and advertisers) flee, Aliya publicly remained optimistic. “We believe Twitter will produce a 4-5x return in just a few years, with comparatively limited downside risk,” Aliya CEO Ross Kestin told Reuters in December 2022.
Aliya also happily defends SpaceX. In April, around the time Bloomberg reported that its Starlink satellite The business continues to burn more cash than it generates, Aliya led to LinkedIn to duplicate Musk’s vision. He posted: “Recent reports indicate a staggering 500,000 new Starlink subscribers in the last four months (a feat that is far from a coincidence) and more than 2.7 million in total. “It is a testament to profound vision accompanied by impeccable execution.”
gigafund, whose co-founder is a member of the board of directors of SpaceX, received more than 1.4 million shares at a cost of almost $100 million. Gigafund was co-founded by Paypal mafia member Luke Nosek, who joined Peter Thiel when he founded Founders Fund. Thiel and Musk are, of course, buddies in the Paypal mafia. At Founders Fund, Nosek led the first venture capital investment in Space He left Founders Fund in 2017 to launch Gigafund. Gigafund co-founder Stephen Oskoui is also a former Founders Fund investor and has led the company to close deals with other Musk companies, including Neuralink and Boring Company.
137 ventures is associated with 137 Holdings, which was authorized to purchase just under 1.1 million shares at a cost of nearly $75 million. 137 Ventures is a venture capital fund that is interesting because Their claim to fame is these types of secondary purchases. 137 Ventures founders Justin Fishner-Wolfson and Alex Jacobson met while at Founders Fund, working on their investment in SpaceX. When Musk originally pushed Thiel and Founders Fund to back his then-new rocket company, the original investment in SpaceX was going to be around $5 million until Fishner-Wolfson advocated for it to be much larger. Founders Fund ended up writing a check that represented about 20% of its fund.and has continued to take large positions in other SpaceX rounds from other funds, Fishner-Wolfson told TechCrunch’s Connie Loizos in 2020. He launched 137 Ventures in 2011.
Point 2 Demonstrate the investment He was allocated 1 million shares that cost $70 million. Point 2 Prove Looks Like a Special Purpose Vehicle Led by Secretive Global Investment Firm Vy Capital, according to a SEC Form D starting July 2022. Vy was founded by Alexander Tamas, who spent his formative years at Yuri Milner’s DST. While Tamas doesn’t say much publicly and is therefore not a vocal supporter of Musk, his company committed $700 million to Musk’s purchase of Twitter. Bloomberg reported at the time. Vy also has a stake in SpaceX and has invested in other Musk companies such as Boring and Neuralink. TO user information for a fund Vy claims that Tamas was the investor who secured for DST its first stakes in companies such as Facebook, Airbnb, Spotify, Twitter, Alibaba and others. Marc Andreessen and the co-founder of his venture capital firm, Ben Horowitz, once described Tamas to Bloomberg as: “He’s on the speed dial of everyone trying to build the most successful, largest-scale global Internet companies in the world.” present”.
Atreides Management is associated with the Atreides Special Circumstances Fund to which almost 429,000 shares were allocated at a cost of almost $30 million. The founder of Boston-based hedge fund Atreides, Gavin Baker, goes back to SpaceX. Before founding Atreides in January 2019, Gavin spent 18 years at Fidelity, eventually managing the $17 billion Fidelity OTC fund. their website says. He made his first investment in SpaceX while at Fidelity, and as of 2022, SpaceX held Atreide’s largest position among the venture capital portion of his fund. Bloomberg reported. (Atreides had $3 billion in assets under management that year, but currently has about $4 billion in assets under management, according to a recent filing with the SEC.) The fund also has a significant stake in Tesla since 2019. And Baker publicly supports Musk. This month only wrote a long post on X advocating for reset Musk’s $56 billion Tesla pay package and supporting Musk’s desire to move Tesla’s incorporation to Texas.
TCP Exploration Fund 2022 He was allocated more than 357,000 shares worth almost $25 million. This is a fund associated with LA’s Troy Capital Partners founded by Myspace founder Josh Berman, according to an SEC Form D. However, for multiple accountsTroy’s managing partner, Anthony Tucker, is responsible for Troy’s investment in SpaceX. Troy has been a backer since SpaceX’s Series J round in 2019, which valued the company at around $28 billion after money, according to Pitchbook. Troy, who emphasizes (but is not limited to) Los Angeles-based companies, was also an investor in the now-defunct Hyperloop One that hoped to build rapid underground transportation between San Francisco and Los Angeles based on Musk’s idea.
Additionally, this SpaceX sale also authorized two more investors to buy about another $50 million in combined shares, although the paperwork trail was too thin on both of them for us to determine their associations with Musk.
SpaceX and all of the funds did not respond to multiple requests for comment, except for Atreides, who declined to comment.