The Roadster Gamble

Tesla needed money before it could build anything, and in February 2004 it found a chairman along with a check: Elon Musk led the company's $7.5 million Series A round with a personal investment of $6.5 million, fresh off the sale of PayPal. It was not, at the time, a controlling stake or a hands-on role -- Musk chaired the board and weighed in on the Roadster's design, but Eberhard and Tarpenning still ran daily operations.

The rounds kept coming, and they kept getting bigger. A $13 million Series B in February 2005, again led by Musk, brought in Valor Equity Partners. A $40 million Series C in May 2006 pulled in backers who needed no introduction: Google cofounders Sergey Brin and Larry Page, and former eBay president Jeff Skoll. By the time a $45 million Series D closed in May 2007, Tesla had raised more than $105 million in private capital before selling a single production car.

The car itself, the Roadster, was a low-volume, high-performance electric sports car built on a modified Lotus Elise chassis, assembled in a converted Chevrolet dealership in Menlo Park starting in 2008. It was the first highway-legal production electric vehicle to use lithium-ion cells, and the first mass-produced EV of any kind since the ill-fated GM EV1 a decade earlier. But building around 2,500 of them, one at a time, in a repurposed dealership, cost far more than the funding rounds anticipated. By January 2009, Tesla had burned through $187 million against just 147 delivered cars, and Musk had personally put in $70 million of his own money to keep the lights on -- on top of the SpaceX bet he was juggling at the exact same time.