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[Arsenikdote]

Again, if VC really wanted to buy SpaceX shares, they would have just done it directly. SpaceX closed funding rounds in Oct 2023, Jan 2025, and Mar 2026. And there's also funds with exposure to SpaceX shares.

Why buy indirectly with X which still has billions of dollars in debt and Elon constantly saying **** you to advertisers which would devalue X/Xai when money is much safer by investing in SpaceX? Xai is also behind in many areas like coding, non stop cash burn with opening new datacenters. Lots of risk vs just investing directly into SpaceX.

X's valuation is properly valued with the last funding round and its the same valuation as when Elon bought it.

If you are arguing that the train of thought is not correct, explain why investment of $1B would occur for a company that was going to be acquired that same month? I am totally ok with other reasonable explanations for the $1B in raised capital for a company that is being acquired, especially when those funding events typically come with expected results and often sway over how the money is used whether indirectly or directly (board seats). That doesn't carry over after an acquisition occurs, nor does the value proposition of their stock if the reason was wholly and solely focused on X. It's hard for me to see another reasonable explanation, but I am actually open to it.

 

[germanbeer007]

If you are arguing that the train of thought is not correct, explain why investment of $1B would occur for a company that was going to be acquired that same month?

it's pretty obvious. cleaning up the balance sheet a bit and showing you have operational runway for a while gives it a fair market value before being sold off. showing you have $1B cash on hand to ensure operational runway puts the meat on the bones for that valuation number.

if it was overvalued, venture capitalists wouldn't have paid $1B at that valuation.

 

[spritle]

How original.
So, what is next?
XVideo? Oh wait... 🤣

Fingers crossed!

 

[Arsenikdote]

it's pretty obvious. cleaning up the balance sheet a bit and showing you have operational runway for a while gives it a fair market value before being sold off. showing you have $1B cash on hand to ensure operational runway puts the meat on the bones for that valuation number.

if it was overvalued, venture capitalists wouldn't have paid $1B at that valuation.

I guess I am confused. The activity of raising the funds and the activity of being acquired were not done separately from each other. They are both processes that are accomplished over a lengthy period of time and would have to be disclosed in both directions to both parties. If the raise had happened and then a couple years later they were acquired, then I totally get that. But the two transactions happened in the same month. And you are correct, there is not many reasonable explanations on WHY an investor would put money, especially $1B, into X.

I also want to speak to something that I thought of, you asked why the investors would not have just invested in SpaceX directly. Obviously, when SpaceX raises funds they only raise what they need and they control that amount of stock and how it is spread between investors, especially when you are a company like SpaceX where everyone wants in. Also, there will likely be no other opportunities to get stock until they go public as they are actually in a buyback phase. Remember, most often when you invest, your class of shares is better than what you would have if you get shares when the company goes public. This can often come into play and is a very real incentive for an investor to want the stock prior to the IPO.

 

[germanbeer007]

I guess I am confused. The activity of raising the funds and the activity of being acquired were not done separately from each other. They are both processes that are accomplished over a lengthy period of time and would have to be disclosed in both directions to both parties. If the raise had happened and then a couple years later they were acquired, then I totally get that. But the two transactions happened in the same month. And you are correct, there is not many reasonable explanations on WHY an investor would put money, especially $1B, into X.

Either you didn't read what I wrote or this is something that doesn't really touch on what I said.

I also want to speak to something that I thought of, you asked why the investors would not have just invested in SpaceX directly. Obviously, when SpaceX raises funds they only raise what they need and they control that amount of stock and how it is spread between investors, especially when you are a company like SpaceX where everyone wants in. Also, there will likely be no other opportunities to get stock until they go public as they are actually in a buyback phase. Remember, most often when you invest, your class of shares is better than what you would have if you get shares when the company goes public. This can often come into play and is a very real incentive for an investor to want the stock prior to the IPO.

It's a negotiation between the investors and the company. investors will throw $$$ at X evaluation and company will through back $$$ at Y evaluation.

FYI there are common major investors between x, xai, and spacex. if investors just wanted SpaceX stock, they would have thrown more $$$$ in SpaceX investing round.

 

[Tim Jobs the 2nd]

Who asked for this?

 

[tranceme]

Now all the parody accounts can annoy each directly.

 

[Arsenikdote]

Either you didn't read what I wrote or this is something that doesn't really touch on what I said.

??? I am replying directly to what you said. There is no cleaning up financials or runway for a company who is about to be acquired. Anyone investing would have learned about the acquisition during due diligence. You clean up your financials, create runway, and raise funds when you are NOT about to be acquired.

 

[Arsenikdote]

It's a negotiation between the investors and the company. investors will throw $$$ at X evaluation and company will through back $$$ at Y evaluation.

FYI there are common major investors between x, xai, and spacex. if investors just wanted SpaceX stock, they would have thrown more $$$$ in SpaceX investing round.

You say this as if the investors are in control of this, which they are not. SpaceX controls who and how much. This is the same thing with OpenAI. They will choose how much they take from different investors, often pitting them against each other for better control over the business so one entity has less voting capacity. When your company is courting investors and you need them to say yes, you don't get this kind of opportunity. But when investors are courting you, the negotiations are more about control of the business and less about the valuation numbers. You are always either giving up control or giving up money. When you can get money whenever you need it, it's all about maintaining control.

 

[germanbeer007]

??? I am replying directly to what you said. There is no cleaning up financials or runway for a company who is about to be acquired. Anyone investing would have learned about the acquisition during due diligence. You clean up your financials, create runway, and raise funds when you are NOT about to be acquired.

You're trying to argue as if I argued that X raising cash and Xai buying X are purely coincidental. That's not what I argued.

 

[germanbeer007]

You say this as if the investors are in control of this, which they are not. SpaceX controls who and how much.

SpaceX controls who, obviously (and plenty of major "who" are common among all three companies). SpaceX doesn't force how much VCs should pay. It's a negotiation. SpaceX will throw ABC terms, VCs will counter with XYZ offer. SpaceX will counter back. Over and over until both are in agreement.

 

[Arsenikdote]

You're trying to argue as if I argued that X raising cash and Xai buying X are purely coincidental. That's not what I argued.

You stated the reason why they would raise cash was to clean up the financials and get a runway as a reasonable explanation against my argument. But that doesn't make sense for the reasons I have just stated. No reason to have a runway or clean up financials since due diligence by xAI make those efforts pointless and also investors have no reason to do a term sheet with a company who is about to be acquired.....unless they WANT their stock to be converted during the acquisition. So I still ask for a reasonable reason if not what I am proposing.

 

[Arsenikdote]

SpaceX controls who, obviously (and plenty of major "who" are common among all three companies). SpaceX doesn't force how much VCs should pay. It's a negotiation. SpaceX will throw ABC terms, VCs will counter with XYZ offer. SpaceX will counter back. Over and over until both are in agreement.

It's not about the value it's about the control. It's a core fundamental of the business-VC relationship. You keep making it about the money no matter how much I keep saying it's not and I am not sure why. If you disagree, I am open to hearing that side of things, but while SpaceX was clearly raising money in the past, they had no issues raising money. In that world, in which few companies get to exist, the focus is on control terms and not the valuation terms.

 

[germanbeer007]

You stated the reason why they would raise cash was to clean up the financials and get a runway as a reasonable explanation against my argument.

you asked "explain why investment of $1B...". I'm explaining to you why.

 

[germanbeer007]

It's not about the value it's about the control

you argued as if SpaceX is in full control of how much and you accused me as if I said investors 100% control how much. neither is true.

in a negotiation, both sides are in control. either can walk away or both sides can agree to certain numbers/terms.

 

[Arsenikdote]

you asked "explain why investment of $1B...". I'm explaining to you why.

lol, why are you sending us in circles?? I asked and you replied:

it's pretty obvious. cleaning up the balance sheet a bit and showing you have operational runway for a while gives it a fair market value before being sold off. showing you have $1B cash on hand to ensure operational runway puts the meat on the bones for that valuation number.

To which I argued

You stated the reason why they would raise cash was to clean up the financials and get a runway as a reasonable explanation against my argument. But that doesn't make sense for the reasons I have just stated. No reason to have a runway or clean up financials since due diligence by xAI make those efforts pointless and also investors have no reason to do a term sheet with a company who is about to be acquired.....unless they WANT their stock to be converted during the acquisition. So I still ask for a reasonable reason if not what I am proposing.

You have only given one response, which makes no sense to the investors nor the business being acquired. When I try to continue the conversation you are sending us in the same circle. I am ok if you disagree for "your own reasons" and don't want to continue the conversation. If you actually have a reason that makes sense of the investment, in a world that an investor would actually participate, I would love to engage in the conversation. Otherwise I am ok just saying that we see things differently because I won't just go in circles, it's a waste of time.

 

[Arsenikdote]

you argued as if SpaceX is in full control of how much and you accused me as if I said investors 100% control how much. neither is true.

in a negotiation, both sides are in control. either can walk away or both sides can agree to certain numbers/terms.

OK, well you obviously haven't been in these situations. If what I have said is confusing, it would be better to go learn about how investment in businesses work and then you will better understand. This is just not the correct forum for me to get into teaching about the ins and outs of businesses and the raising of funds (VC, Angel, etc...). I am sorry that it feels like I was being confusing or swapping points of view, I truly was not. If you are in the VC, Angel, etc... space my comments would not be vague or saying anything that is abnormal. The way you talked at the beginning, I thought you were more in the loop on it. My fault for not getting clarification, I apologize. The control that you are talking about is not the control I am talking about. What you are describing as "control" is correct. I was speaking of the mechanism of control over a business which is a fundamental part of the investment process and often comes in multiple sections and conditions within the term sheets that define the investment. That is as much as I will say, again not teaching here, just trying to show there was no attempt on my side to appear like I am talking out both sides of my mouth. Hope you have a great week.

 

[germanbeer007]

lol, why are you sending us in circles?? I asked and you replied:

To which I argued


You have only given one response, which makes no sense to the investors nor the business being acquired. When I try to continue the conversation you are sending us in the same circle.

You're mischaracterizing my argument as if I said raising money and being acquired are coincidental. That's not what I argued. I'm not the one sending this in the same circle when you can't relinquish this mischaracterization.

 

[germanbeer007]

OK, well you obviously haven't been in these situations.

I've been in a few startups, one that was acquired by a production company. I'm well aware of how it works. I'm so sorry if you've never been this position and it seems like you're purely guessing on how this actually works. I thought you were at least well versed in how funding rounds work in startups but I guess I need to explain it step by step for you to understand this better. My apologies.

 

[Arsenikdote]

You're mischaracterizing my argument as if I said raising money and being acquired are coincidental. That's not what I argued. I'm not the one sending this in the same circle when you can't relinquish this mischaracterization.

All you have to do is provide the reason. Investors would have known about the acquisition. Your first attempt was not convincing. When you stated it was done to clean up their books and gain runway, that is incorrect. So, what is the reason? Ignore all the rest, just provide a reasonable explanation when the investors knew about the acquisition.

 

[Arsenikdote]

I've been in a few startups, one that was acquired by a production company. I'm well aware of how it works. I'm so sorry if you've never been this position and it seems like you're purely guessing on how this actually works. I thought you were at least well versed in how funding rounds work in startups but I guess I need to explain it step by step for you to understand this better. My apologies.

I can appreciate the perspective but being in a startup and owning the startup are not the same thing. I haven't "been in a few startups" I have OWNED startups, I have sold my businesses and pivoted that into new ones. I have been a consultant on multiple M&A's. I have helped sourced (aka found and been paid a commission) for VC funding for startups as well as late stage businesses. I am not guessing, I am providing real world experience that started when I had my first business in high school.

Lashing out because you don't know something is not a good look. I am not trying to be mean, however the comment about control and how you used it told me that you haven't had to DO this. I have a different perspective which means that when we both were talking about SpaceX's rounds of funding we were using the same words with different meanings. My apology was sincere. I wasn't trying to shift the story or be confusing about the SpaceX having control. That is also why I was saying from your perspective, you are totally correct. Any party at any time can walk away. They have equal control. But looking at control as the balancing point mechanism to equity during the fundraising process, then we are now looking at a different type of control, maybe call it the capital C version? Again, if you learn about how the process works from an owner/investor perspective and you will better understand the idea of "control", and not drag-along or any other more layered aspects, just the straight up simple balance of equity vs control.

 

[germanbeer007]

All you have to do is provide the reason.

I did.

 

[germanbeer007]

I can appreciate the perspective but being in a startup and owning the startup are not the same thing.

I cofounded one. The one that was bought out by a production company.

 

[Arsenikdote]

I cofounded one. The one that was bought out by a production company.

Cool, I LOVE when people make things. Entrepreneurs are my favorites and we have to look out for each other. Not sure if your startup needed funds (non-debt funds) prior to being acquired, but if you are ever in a position in the future where you need to get funding, definitely look into equity vs control because everything else about a term sheet is basically noise comparatively. Sure it might be important stuff if you turn into some mega-corp or end up having 6 rounds of funding. But nothing on that term sheet matters as much as equity and control. Lots of good resources but Brad Feld is one of fav's and if you have ever heard of The Rule of 40, that is him.

 

[germanbeer007]

Cool, I LOVE when people make things. Entrepreneurs are my favorites and we have to look out for each other. Not sure if your startup needed funds (non-debt funds) prior to being acquired, but if you are ever in a position in the future where you need to get funding, definitely look into equity vs control because everything else about a term sheet is basically noise comparatively.

I'm well versed in how it works.