Like many high-value startups, SpaceX sometimes allows its employees to cash out some of their stock by selling it to outside investors authorized by the company.
TechCrunch has taken a look at an internal SpaceX document about such a tender offer from May 2022. Musk posted on X Last month SpaceX held such employee sales every 6 months.
These documents provide interesting insights into the investors who are authorized to buy these secondary shares, and the good deals they get.
In that offering, investors paid $70 per share for employees, the filing shows. That’s a huge bargain compared to the share prices investors pay when they invest in primary rounds – where the company sells shares directly to raise capital.
During the primary sale in 2022, the shares went for $270. (SpaceX hasn’t sold shares in a primary round at a price of $70 since its Series G went for $77.46 a share, filings say. That was in 2015, according to PitchBook.)
Of course, the main reason for the giant discount in price is that employees own common stock, and investors who buy in major rounds typically buy preferred stock that entitles them to dividends and liquidation preferences. They are the first to get paid their investment if the company ever sells itself.
In fact, this document reveals that as of 2022, if SpaceX were to sell itself, the first $6.67 billion would be owed to preferred shareholders. Since then, the company has raised another $750 million, so the amount initially paid to investors is likely to increase by at least that amount. If SpaceX were to actually command its current astronomical valuation of $350 billion, these liquidation preferences — paying investors first — won’t be a problem for employees or other shareholders of common stock. But if one day the company goes for a sale below $7 billion, common stockholders can get nothing.
As for dividends, as of 2019, internal documents seen by TechCrunch said SpaceX has never paid out. But if its board of directors wanted to declare dividends, they would be paid in fixed amounts based on when investors bought shares. These amounts range from a few pennies per share for shares bought in its earliest and cheapest rounds, to over $10 per share for those bought in later and more expensive rounds.
For employees, the news about their shares in 2022 was particularly good. In February 2022, SpaceX conducted a 10-for-1 stock split of its Class A, B and C common stock. The preferred stock was not split. The filings do not make clear what the differences are between the various classes of common stock. In public companies, different classes often have different voting rights. For example, a class of shares held by the founder may have 10 votes per share, allowing founders to retain control of their companies while selling shares and cashing out.
In this case, it’s not clear when, if ever, SpaceX will go public. Secondary sales like this remain one of the only ways employees have to sell their shares.
Another 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 adjusted for the stock split, Bloomberg reported at the time. And Bloomberg also reported last month that the next tender offer could be as high as $108 to $110 each.
Which investors should buy?
One of the most interesting revelations in these documents was that only a small number of investors were named as authorized buyers. And most of them were in SpaceX’s orbit, so to speak, meaning the investors are either vocal supporters of SpaceX founder Elon Musk or have had other, historically close connections.
They were:
Andreessen Horowitz (a16z) was authorized to purchase approximately 4.3 million shares for nearly $300 million. Interestingly, a16z isn’t a historic long-time investor in SpaceX, but it managed to get its equity on the table in a big way in the company’s $250 million raise in August 2022, according to PitchBook. It also became a lead investor in SpaceX’s $750 million round, with a valuation of $137 billion in 2023, CNBC reported.
The firm’s co-founder, Marc Andreessen, has known Musk for decades as they ran the same circles of tech billionaires in Silicon Valley. In recent years, he has become a Musk champion, expressing admiration for the CEO of SpaceX, Tesla and X in everything from the way Musk uses his money to continue launching startups to applauding Musk’s tenacity . Andreessen even publicly debated billionaire and rival VC Vinod Khosla (backer of OpenAI) at X (owned by Musk) after Khosla praised OpenAI shortly after Musk sued OpenAI. The debate caught Musk’s attention.
Aliya Capital Partners is linked to the Aliya Growth Fund, which was authorized to buy just over 1.4 million shares for nearly $100 million. Aliya is a family office for the wealthy in Miami that says SpaceX is one of its biggest holdings. Aliya — which has stakes in many prized startups such as Figure AI, Impossible Foods, Anduril — reached $360 million when Musk bought Twitter in 2022 for $44 billion, Reuters reported. Even after Musk took an immediate ax to Twitter’s overall numbers and his management style drove others (and advertisers) away, Aliya remained publicly optimistic. “We believe Twitter will produce a 4-5x return in just a few years, with limited downside risk,” Aliya Chief Executive Officer Ross Kestin told Reuters in December 2022.
Aliya also happily earns SpaceX. In April, around the time Bloomberg reported that his Starlink satellite business was still burning more money than it was bringing in, Aliya took to LinkedIn to double down on Musk’s vision. He posted: “Recent reports show 500,000 new Starlink subscribers in the last four months – no coincidence – and over 2.7 million in total. It stands as a testament to deep vision accompanied by impeccable execution.”
Gigafundwhose co-founder is a SpaceX board member, was allotted over 1.4 million shares at a cost of nearly $100 million. Gigafund was co-founded by fellow PayPal mafia member Luke Nosek, who joined Peter Thiel when he founded Founders Fund. Thiel and Musk are, of course, other members of the PayPal mafia. At Founders Fund, Nosek led the first VC investment in Space X, took a seat on the board, and has been on the board ever since. He left Founders Fund in 2017 to launch Gigafund. Gigafund co-founder Stephen Oskoui is also a former Founder Fund investor and has led the firm in deals with other Musk companies, including Neuralink and the Boring Company.
137 Entrepreneurship is affiliated with 137 Holdings, which was authorized to buy just under 1.1 million shares at a cost of nearly $75 million. 137 Ventures is a VC fund that’s interesting because its claim to fame is these kinds of secondary acquisitions. Founders Justin Fishner-Wolfson and Alex Jacobson met while at Founders Fund, working on its investment in SpaceX. When Musk first lobbied Thiel and the Founders Fund to back his then-new rocket company, the original investment in SpaceX was going to be about $5 million until Fishner-Wolfson advocated that it be much larger. Founders Fund ended up writing a check that was about 20% of its funding and has gone on to take large positions in other SpaceX rounds from other funds, Fishner-Wolfson told TechCrunch’s Connie Loizo in 2020. He launched 137 Ventures in 2011.
Point 2 Try the Investment was allocated 1 million shares, which cost 70 million dollars. Point 2 Prove looks like a special purpose vehicle run by the secretive global investment firm You capitalaccording to SEC Form D from July 2022. Vy was founded by Alexander Tamas, who spent his formative years at Yuri Milner’s DST. While Tamas doesn’t say much in public, and thus isn’t a vocal supporter of Musk, his company has donated $700 million to Musk’s purchase of Twitter, Bloomberg reported at the time. Vy also has a stake in SpaceX and has invested in a number of other Musk companies such as Boring and Neuralink. A prospectus for a Vy fund claims that Tamas was the investor who provided DST with its early stakes in companies such as Facebook, Airbnb, Spotify, Twitter, Alibaba and others. Marc Andreessen and his VC firm co-founder Ben Horowitz once described Tamas to Bloomberg as, “He’s on speed dial for everyone trying to build the most successful, highest-scale, global companies internet today.”
Management of Atreides is affiliated with the Atreides Special Circumstances Fund, which was allocated approximately 429,000 shares at a cost of approximately $30 million. Boston-based hedge fund Atreides founder Gavin Baker goes way back with SpaceX. Before founding Atreides in January 2019, Gavin spent 18 years at Fidelity, rising to manage the $17 billion Fidelity OTC Fund, his website says. He made his first investment in SpaceX while at Fidelity, and in 2022 SpaceX was Atreides’ largest position among the VC portion of its fund, Bloomberg reported. (Atreides had $3 billion in assets under management that year, but currently has about $4 billion in AUM, according to a recent SEC filing.) The fund has also had a significant stake in Tesla since 2019. And Baker is a backer Musk’s public. Only this month he wrote a long post on X supporting the reinstatement of Musk’s $56 billion Tesla pay package and supporting Musk’s desire to move Tesla’s incorporation to Texas.
TCP Research Fund 2022 over 357,000 shares were distributed for nearly $25 million. This is an LA related fund Troy Capital Partners founded by Myspace founder Josh Berman, according to SEC Form D. However, by some accounts, Troy’s managing partner, Anthony Tucker, is the one 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 about $28 billion post-money, according to PitchBook. Troy, who highlights LA-based companies (though is not limited to them), was also an investor in the now-defunct Hyperloop One that had hoped to build rapid underground transportation between San Francisco and LA based on Musk’s idea.
In addition, this sale of SpaceX also authorized two other investors to buy about $50 million more in combined shares as well, although the document trail was too thin for both of them for us to determine their ties to Musk.
SpaceX and all the funds did not respond to multiple requests for comment, except for Atreides, which declined comment.
Update: This story was originally published on June 19, 2024, and was updated on January 1, 2025, to include SpaceX’s latest estimate.
