Several weeks ago, the WSJ reported that SpaceX, Elon Musk’s rocket company, was set to raise $500 million from earlier shareholders and the Scottish money management firm Baillie Gifford & Co. in a bid to help get its internet service business off the ground.
The Hawthorne, Calif. company still hasn’t announced the round, but it nevertheless made things official today, filing with the SEC more details about the fundraise. Though the filing doesn’t confirm Baillie Gifford’s involvement, it does show that the company has secured from 8 investors at least $273.2 million toward a planned $500 million round.
It also, notably, lists the involvement of longtime investor Steve Jurvetson, who has been on the board of both SpaceX and Musk’s car company, Tesla Motors, for 10 and 13 years, respectively. Why it’s worth mentioning: After Jurvetson left DFJ, the venture capital firm he co-founded, in 2017 amid questions about his personal conduct, there was uncertainty around whether he would keep those director positions. Indeed, at the time, a Tesla spokesperson told the outlet Recode that Steve Jurvetson “is on a leave of absence from the SpaceX and Tesla boards pending resolution of these allegations.”
DFJ’s investigation into those allegations led the firm to later apologize for an event hosted at the Half Moon Bay home of Jurvetson, which reportedly featured sex and drug use. Musk, however, who attended the event, suggested that it was far more sedate, telling WIRED at the time, “If there are ‘sex parties’ in Silicon Valley, I haven’t seen or heard of one . . If you want wild parties, you’re in the wrong place. Obviously. That DFJ party was boring and corporate, with zero sex or nudity anywhere.”
Either way, Jurvetson wasted little time in forming a new venture firm, Future Ventures, which has been up and running for 11 months and looks to fund startups in commercial space exploration, deep learning, quantum computing, robotics, AI, blockchain, sustainable transportation, synthetic biology and clean meat.
Now we know that he remains involved in SpaceX, too, even while sources suggest he is still, 13 months later, on leave. (Neither Jurvetson nor SpaceX has responded to requests for comment for this story.)
It’s not so surprising, given that Musk and Jurvetson have enjoyed a long relationship. In fact, because SpaceX remains privately held and Musk holds super-voting shares, he has extra power in corporate decison-making, as Recode noted in a more recent report.
Meanwhile, publicly traded Tesla has also stuck by Jurvetson. Despite changes to the board’s composition that were brought about as part of its settlement with the SEC — late last year, it added new board members Larry Ellison and Kathleen Thompson-Wilson, and Robyn Denholm replaced Musk as chairman — Jurvetson remains a director.
Assuming SpaceX closes its newest round of funding, it will have raised $2.5 billion in equity funding altogether, according to Dow Jones VentureSource.
Other outside directors listed on the new filing include Luke Nosek of Founders Fund; Donald Harrison, a longtime Googler who is currently the company’s president of global partnerships and corporate development; Kimbal Musk, brother to Elon; and Antonio Gracias of Valor Equity Partners.
Kimbal Musk and Gracias, like Jurvetson, also sit on the board of Tesla, much to the chagrin of one prominent shareholder advisory firm that has urged the company to boot them out.
Jeffrey Sonnenfeld, who is Senior Associate Dean for Executive Programs at Yale University’s School of Management, also thinks they should go, calling them “cronies” and characterizing Musk’s refusal to part ways with Jurvetson in particular “irresponsible.”
“It’s some of the bro culture loyalty that Musk defends,” says Sonnenfeld of the fact that Jurvetson remains a director with both companies while remaining on temporary leave.
Not holding any punches, Sonnenfeld further blames for the SEC for not doing even more about Tesla’s board when it tangled with Musk last year. “The SEC didn’t even think of this oddity as a governance concern. The fact that [both companies] have this director on there, who, even if he is completely innocent, has been unable to serve the interests of the company now for 13 months, is just one of the many ways that Musk so artfully outmaneuvered the agency.”
Directors “have to represent all owners of a company,” adds Sonnenfeld. “If Jurvetson and Musk have some personal bond, then Musk could hire him as an advisor or consultant. But he shouldn’t be in an agency role. These aren’t city council meetings.”
According to the WSJ’s earlier report, SpaceX’s new round will be used to finance a new satellite internet service, one whose early designs suggest it could be powered by more than 4,000 satellites orbiting the earth at low altitudes.
Update: Note, an earlier version of this story noted that Jurvetson remains involved in SpaceX but did not report on his continued status on temporary leave.