Earnings from Zip2 & PayPal shares helped Elon Musk pursue his dreams
Elon Musk was influenced by his electro-mechanical engineer dad and developed an interest in technology as a 10-year-old boy. His craze for technology led him to learn computer programming by himself. It was quite a matter of surprise that he sold the code for a BASIC-based video game called Blastar to a magazine, PC and Office Technology for approx. $500 when he was just 12.
In collaboration with his brother Kimbal, he launched a web software company named Zip2 with $28 thousand of their dad’s money in 1995. Starting with the development and marketing of an internet “city guide” for a newspaper publishing industry, he received contracts from Chicago Turbine and The New York Times.
He wanted to be CEO of Zip2, but all board members didn’t agree with his intents. Finally, the company was sold to Compaq for 307 million USD in cash and 34 million USD in stock options in February 1999.
Elon Musk held largest shares of PayPal until the company was acquired by eBay
Musk obtained 7% from the Zip2 sale amounting $10 million, which he invested in co-founding online financial services and e-mail payment company called X.com. A year later, X.com merged with Confinity, the company that focused on the money transfer service known as PayPal.
Shortly afterward, the company focused on PayPal service and was finally renamed PayPal. Early growth of the company was driven by the viral marketing campaign which saw a rapid increase of customers.
Musk, who held the chair of the company before October 2000 was ousted from the position, due to company leadership disagreement, over his desire to move Unix-based infrastructure of PayPal to Microsoft Windows. However, he remained on the board until eBay bought PayPal for 1.5 billion USD. Musk was provided with $180 million for his 11.7 % shares, which was the largest amount of shares among shareholders.
With his involvements in various projects, the horizon of his vision was broadened even more. Receiving enough funds from the sale of PayPal has helped him in pursuing his other interests like alternative energy sources and space engineering services. Now, he is the CEO of companies like SpaceX and Tesla Motors.