One thing before you check out for the weekend

Hey

I want to start this email with a movie recommendation this week before I dive into a capital raise recommendation. Yesterday, I was watching - The Menu - and wow, it was intense. I'm not a movie critic (though I'm great at criticising), but I do understand how someone so complicated can get melted by something so simple.

Anyway, talking of complicated, creative, and juicy - this week I broke down the capital raise strategy of one of the most talked-about companies: Tesla. (Yup, that's how I collect my thoughts).

I think Tesla's biggest and smartest investment has been, and will continue to be, Elon Musk. And frankly, say whatever you want - Musk is ambitious. He's not scared of throwing random ideas at the world, and he doesn't care about judgment at all.

He has big vision, and if anyone in the world can make his visions come true, it's him.

I don't take inspiration from it on a daily basis, but I'd like to think that I have a very similar style of working. Maybe a bit more structured. Hmm, maybe a little less risk-averse. Who knows? More importantly, who cares?

Now, if you take one thing from Tesla's - or rather Elon Musk's - playbook this week, I would strongly recommend one thing very opposite to what he did.

Leverage conservatively. 

Musk famously mortgaged everything for Tesla and SpaceX… and nearly lost both. For every Elon, there are hundreds of founders who bet the house and never got the Hollywood ending.

Be ambitious, but don’t get carried away.

My rule? Don’t leverage more than 30-35% of your net worth. I have a simple logic behind it - if you can only afford to buy something once, you can’t afford it. At 30%, you could theoretically buy it twice and still have a safety net. 

It's the difference between strategic risk and financial self-sabotage. Be ambitious, absolutely. But don't get so carried away.

Thanks for allowing me into your inbox every week.

I’ve been having some amazing conversations around capital raises, If this is something you’re looking into, or is your area of interest, my inbox is always open. 

PS: If your business needs funding or funding advice, explore the options at my company FundOnion here. We’re amazing!

Talk soon,

James