On April 25, Twitter accepted Elon Musk's acquisition deal. Under the deal, Musk will buy Twitter for $54.2 per share, for a total of about $44 billion. According to regulatory documents, Musk struck the deal through his family office, Excession.
As the wealth manager of the world's richest man, Excession remains in secrecy. "Home New Wisdom Point" sorts out the general outline of Excession based on the data, hoping to give you a glimpse of Musk's family office and his foundation.
Wen | family to run a new wisdom point
1
Musk's "Big Butler"
This time, Musk's financing plan to acquire Twitter is led by Morgan Stanley. In fact, Musk's partnership with Morgan Stanley has a long history, "and every time they were pressed to get more loans or lower interest rates, they agreed." ”
As of April 30, 2019, Musk has secured approximately $500 million in credit lines from affiliates of Morgan Stanley, Goldman Sachs, and Bank of America.
The reason why Musk and Morgan Stanley can have such a good relationship is mainly the result of his housekeeper Jared Bercal in the middle.
In August 2018, Musk tweeted that he was working with financial advisers Silver Lake Capital, Goldman Sachs and legal counsel Wachell on the proposal to launch Tesla's privatization. However, less than an hour after the tweet was posted, Silver Lake Capital responded that it was not involved in the Tesla privatization deal.
A day later, Jared Burchar sent a message to Musk suggesting he hired Morgan Stanley as a financial adviser for his Tesla privatization.
Jared Bercard was a former senior vice president at Morgan Stanley, and earlier he worked as a financial analyst and wealth manager at Goldman Sachs and Merrill Lynch. He began working as a wealth manager at Morgan Stanley in 2010 and was poached by Musk in his family office in 2016 to help create The Excel, where he was responsible for the management, operations, and investments of the office.
In addition to his role at Musk's home office, Jared Bercal has worked for Musk's other companies, including as CEO of Neuralink, Musk's brain-computer interface company, a director of the tunneling company Boring Company, and a board member of Musk's Private Philanthropy Foundation.
In addition, Jared Bercal is also the manager of Horse Ranch LLC. In 2021, the company bought some land near Tesla's Austin Gigafactory.
In fact, the relationship between the two has surpassed that of the business partners. A few years ago, Musk was indicted for posting on Twitter accusing a British diver and caving expert of being a "pedophile." Later, Jared Bercard spent $50,000 to hire a private detective to investigate the cave expert, and Musk won the case.
Musk's relationship with Jared Burchar is a good illustration of the relationship between bosses and professional managers, as Wharton management professor Raphael Amit puts it, "Once you appoint someone to run a family office, it means you trust him." Musk did this to give Berchar the most control. ”
It can be said that it is not an exaggeration to describe musk's relationship with Jared Burchar as a "close friend".
Because Musk's home office is extremely secretive, the size of the assets and personnel are unknown. Musk said in a defamation trial in 2019 that excession is basically just two people. In addition to Musk, the other of these two people should be Jared Bercal.
2
A gateway to the unknown universe
Excession was founded in 2016. Musk named his home Excelsion or was inspired by Banks' EPSS novel Excelsion. In 2015, Musk carried the book at the Sun Valley Summit in Idaho. In addition, Musk has also mentioned the book on Twitter.
In fiction, Excession is a giant black sphere that is older than the universe itself and has perception in space. It seems to be a gateway to the unknown universe that can act as a bridge for a group of people who want to travel between universes.
Now, Musk is trying to reach this entrance "safely" through artificial intelligence. Musk had argued that AI was particularly dangerous, more dangerous than the atomic bomb, and in 2015 pledged $1 billion to set up a research firm called OpenAI that would develop safer AI "in a way that is most likely to benefit all of humanity."
On the one hand, Musk hopes that he can be the "master" of artificial intelligence, on the other hand, he also has great respect for artificial intelligence. He once said that 2025 is a turning point in the explosion of artificial intelligence technology; in the future, artificial intelligence will be omnipresent, and human beings will continue to enhance themselves in the competition with artificial intelligence...
In 2016, Musk founded The Boring Company, an infrastructure and tunneling company, after deeply dissatisfied with the two-dimensional traffic flow model in Los Angeles. It was originally owned by a subsidiary of SpaceX until 2018, when it became an independent company, with 90% of musk's ownership and 6% of SpaceX's ownership. In 2019, The Boring Company was valued at $920 million.
Also in 2016, Musk founded NueralLink Corporation, a neurotechnology company that develops implantable brain-computer interfaces (BMIs). Since its inception, the company has hired well-known neuroscientists from several universities and conducted several animal experiments, including building a Neuralink device into a monkey's brain to manipulate video games with their minds.
In NueralLink's Series C funding round, it raised $205 million and is also seen as the largest funding in the space to date.
It is worth mentioning that at that time, Musk stepped into the field of brain-computer interface with Chen Tianqiao, who established the Chen Tianqiao Luo Qianqian Research Institute (TCCI) Transformation Center in 2016. In addition, Alibaba, Baidu, Tencent, iFLYTEK, etc. have all laid out in the brain-computer interface.
3
"Homeless" Musk
Everyone thinks Musk is the richest man in the world, but Musk says he doesn't have much cash.
In 2019, Musk was sued for accusing a British cave expert of being a "paedophile", and in court, he said that although he had a net worth of about $20 billion, he did not have any cash.
* Musk's fortune
After Tesla stock grew eightfold in value in fiscal 2020-2021, Musk replaced Jeff Bezos as the world's richest man. As a billionaire, talented entrepreneur and engineer, Musk's net worth as of November 11, 2021 is estimated at $281.6 billion. Most of his huge fortune comes only from his Tesla and SpaceX stocks.
In terms of investment, Musk is mainly configured through his family office, Excession. Musk doesn't invest in anything other than investing in his own companies, SpaceX, Tesla, Solar City, infrastructure and tunneling company The Boring Company, and so on. In addition, he does not own any other public securities other than Tesla.
Excession has been operating in a confidential manner. However, we can still infer the general situation of its asset allocation from the relevant information.
Musk once owned a substantial real estate portfolio that included millions of dollars in assets located in and around Los Angeles, California. But then, as the public questioned his vast fortune, he sold his 7 properties in California.
In December 2021, Musk cut the price of his house sharply from $37.5 million to $30 million in order to sell it as soon as possible, and finally sold his last California luxury home, joining the ranks of the "homeless".
Becoming "homeless," Musk also tried to transform Twitter headquarters into a homeless shelter and won support from more than 90 percent of the 1.7 million people poll launched by Twitter. In addition, the proposal was supported by Amazon founder Jeff Bezos: "Let's make a partial makeover!" The results were great. ”
In addition to this, Musk also supports cryptocurrencies as the future of finance. According to recent reports, in addition to other large-scale investments in Dogecoin and Ethereum, he has invested more than $5 billion in Bitcoin.
Excession has also been involved in Musk's philanthropic investments, including a $100,000 donation to a famine relief organization in 2020 by Jared Bercard and $1 million to Texas, which was hit by a winter storm.
4
Is there a way to be kind and charitable or tax avoidance?
In addition to Excession, Musk will actually make donations through his foundation, reaching out to some institutions and groups with interests.
The Musk Foundation is a private grant foundation founded in 2002 by Musk and his brother Kimbal Musk with $2.5 million in assets. The foundation has a small board of directors, with Elon Musk as president and director, Kimbal Musk as secretary, treasurer and director, and Jared Bercal as well.
As of June 2020, the foundation's total assets amounted to $941 million.
The foundation funds five areas, including renewable energy research and advocacy, human space exploration research and advocacy, pediatric research, and science and engineering education, some of which intersect with Musk's business projects.
The sole funder of the foundation is Musk. Between 2002 and 2015, the foundation donated an average of $493801 a year. By mid-2015, the Musk Foundation's assets had fallen to $60,000, but in 2016, Musk donated another 1.2 million Tesla shares worth about $255 million to the foundation at the time. Subsequently, the foundation embarked on a series of huge donations — most of which went to financial institutions that helped it manage its philanthropy.
Among them is the Catalyst Family Office, the agency responsible for managing the Musk Foundation's finances. It is a Silicon Valley-based company that provides comprehensive tax planning, strategic advice and integrated family office services to ultra-high net worth individuals and families.
Between 2016 and 2018, the Musk Foundation spent $65 million, slightly more than the minimum amount the foundation must pay each year (5 percent of assets) to avoid a fine from the IRS. According to documents submitted by the foundation in 2017, most of the donations went to about 200 nonprofit organizations focused on education, health care, community services, the environment and space.
*Number of various donations from the Musk Foundation as of 2017
Most donations are relatively small, averaging $10,000, with about 20 percent of the funds going to research, technology, and community services. But over time, according to IRS records, Musk's donations gradually shifted to institutions and individuals with his interests, including his family and associated companies:
Musk had donated $8,750 to neurosurgery researchers at UCLA, while Musk's Neuralink company was launching a brain-computer interface research project; $10,000 to the Los Angeles Police Foundation and $25,000 to the Los Angeles Rose Foundation to ease traffic jams.
Musk's foundation donated $60,000 to the Ad Astra School. The school is an experimental private school co-founded by SpaceX's Los Angeles-area campus. It is reported that the children of Musk and SpaceX employees have all studied at this school.
The foundation also spent $183,000 to help launch Kitchen Community, a charity led by his brother Kimbal Musk.
He has also donated photovoltaic systems to communities affected by the 2010 Deepwater Horizon disaster, also known as the Gulf of Mexico oil spill, and to communities affected by the 2011 Fukushima earthquake, the installation company of which is solar City (now part of Tesla).
In addition, Musk has donated $257 million to the DAF Fund. DAF fund funds can be deducted from taxes, stocks and real estate, etc., and can also be deducted before tax at their fair value. Before being officially used for charity projects, funds can increase in value and preserve value in accordance with market-oriented investment and financial management methods, and can invest in fixed income products, and can also do venture capital and impact investment.
*2002-2017 Musk Foundation Individual Donation Form (Incomplete Statistics)
As of 2017, the three largest donors from the Musk Foundation were: $10 million in YC.org and $50 million in two advisory funds under Pioneer and Fidelity, and in 2018, Fidelity Investment led a $500 million injection into SpaceX. Together, these three donations accounted for 86% of their donations.
*In 2002-2017, the Musk Foundation made the largest individual donation
Not long ago, in an interview, Musk said that SpaceX, Tesla, Neuralink, The Boring Company are all philanthropy, "If you say that philanthropy is love for human beings, they are philanthropy." ”
5
Family members came together
In Musk's business world, we can always see his family.
In the course of Musk's startup, his younger brother, Kimbal Musk, has been his venture partner and investor, from Zip2 to PayPal to Tesla. In addition, Kimbal Musk is a board member of Tesla, SpaceX and Chipotle.
*In the middle is Musk's younger brother, Kimbal Musk
"When Kimbal and I started our first company, instead of buying an apartment, we rented a small office and slept on the couch." Musk recalled, "We took a shower at the YMCA. We only have one computer. ”
Later, Zip2 was sold to Compaq in 1999 for about $300 million, and much of Kimball's wealth later went to another investment closely related to his brother's company, Tesla. During the 2008 financial crisis, Kimball made a significant investment in Musk's electric car company.
Later, Kimbal Musk founded his own food company. In addition to Kimbal Musk, a millionaire, there are several other millionaires in Musk's family:
Musk's sister, Tosca Musk, runs a Passportflix streaming service;
Cousin Lyndon Rive was the co-founder of SolarCity, which was later acquired by Musk. Prior to founding SolarCity, Lyndon Rive was a co-founder of software company Everdream, which was later sold to Dell.
Cousin Peter Rive, a former co-founder of SolarCity and Everdream, now joins clean energy startup Zola Electric;
Cousin Russ Rive, a former co-founder of Everdream, is now the founder of art production company SuperUber, whose customers include Tesla and SpaceX.
It is the so-called "father and son soldiers, fight tiger brothers"
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