[bob33212]

Great Article. A lot of people don't understand how important cash flow is. Even Elon pointed out that having factories close to customer is very important for a fast growing company like TSLA because if you grow too fast you'll be putting so many cars on boats before they are paid for that you will have no cash.

I disagree with the framing of both articles somewhat. The question should be "What is limiting your growth?" Is raising money going to distract you from making a product customers need and love? Then skip it. If being too small for enterprises to take you seriously is a blocker then you'll need to raise money.

[kgwgk]

Musk definitely understands the importance of (incoming) cash flows. Being paid upfront for functionality that may or may not be ever available is genius.

Edit: /s

[ashtonbaker]

Is it really genius? Especially when you put it quite so bluntly? I've been wondering if a class action lawsuit around this could end up being a significant risk to Tesla.

edit: woosh

[bigbubba]

Genius, like selling a bridge you don't own.

[twic]

See, that's illegal.

But creating cash-settled bridge derivatives and selling those, now that's perfectly fine.

[nceqs3]

Matt Levine would be proud.

[hinkley]

Similarly, he doesn’t want his space ships to be in transit or grounded for repairs for a long time because that represents inventory.

There were some old ideas about how an interplanetary civilization would work, and in particular shipping, and now I understand better why we are still stuck on the ground. We are a long way from having ships so cheap that we can have them just floating around on ballistic orbits.

[orky56]

"What is limiting your growth?" is a myopic view of this problem. An injection of capital provides runway at a minimum and leverage in many cases regardless of a company's situation at nearly every stage. Your suggestion of "growth" as the metric to be maximized is the main issue. If an enterprise wants to generate maximum short-term profits for the owner, establish a large market share initially, or generate maximum cash flows long-term, each presents a very different view of when and how capital can solve problems.