• Tesla Says It Told Government of Autopilot Crash Before Stock Sale

    Tesla MotorsTesla says it told regulators about the May 7th crash involving one of its electric cars in self-driving Autopilot mode nine days after the incident, adding that there was nothing unusual in either the delay or its decision to keep quiet about the incident before a federal investigation was publicly announced last Thursday.

    Tesla says the company was informed of the accident “shortly” after it took place.

    Tesla’s statement, issued late this afternoon, seems to be a direct response to a Fortune article published earlier today that notes the enormous stock sale that Tesla announced on May 18.

    On May 18, eleven days after [Tesla owner Joshua] Brown died, Tesla and CEO Elon Musk, in combination (roughly three parts Tesla, one part Musk), sold more than $2 billion of Tesla stock in a public offering at a price of $215 per share—and did it without ever having released a word about the crash.

    To put things baldly, Tesla and Musk did not disclose the very material fact that a man had died while using an auto-pilot technology that Tesla had marketed vigorously as safe and important to its customers.

    When Fortune sought comment from Musk, he first replied that he didn’t think the fact of the crash was “material to the value of Tesla” and therefore did not need to be disclosed at the time of Tesla’s stock sale. He reportedly continued, via email to Fortune:

    Indeed, if anyone bothered to do the math (obviously, you did not) they would realize that of the over 1M auto deaths per year worldwide, approximately half a million people would have been saved if the Tesla autopilot was universally available. Please, take 5 mins and do the bloody math before you write an article that misleads the public.

    In this afternoon’s statement, Tesla said it had disclosed the incident to the government by May 16.

    Asked by Reuters why Tesla didn’t also disclose the accident to the public before that share sale, the company sent the outlet the following statement:

    Tesla does not find it necessary, nor does any automaker, to share the details of every accident that occur in a Tesla vehicle. More than a million people die globally every year in car accidents, but automakers do not disclose each of these accidents to investors, let alone before those investigations are complete and without regard to what the results of those investigations end up being.

    More here.

    Connie

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  • Longtime Tesla Motors CIO Jay Vijayan Has Formed Stealth Startup

    Tesla MotorsJay Vijayan, who spent four years as the Chief Information Officer of Tesla Motors, and who served as its VP of IT and business applications for a year before that, left the company in January to form his own Bay Area startup.

    Vijayan isn’t talking yet about that company. (StrictlyVC reached out to him last Monday and he hasn’t responded.)

    But his departure comes at an interesting time, given the almost unprecedented excitement surrounding the Model 3 car that Tesla unveiled to the public last Thursday night.

    As you may have already read, the company had booked more than 253,000 orders in the first 36 hours after CEO Elon Musk revealed several prototypes in a showy display reminiscent of Apple product releases.

    That kind of demand is surely putting to the test a proprietary software system called Warp that Vijayan and his team of engineers at Tesla designed to support the company’s direct sales efforts in the U.S. (In 2014, the WSJ had taken a long look at the platform here.)

    Vijayan also appears to be doing some angel investing, which may or may not be related to his new startup. Last Monday, numerous India-based outlets reported that FixNix, a Bangalore-based governance, risk management, and compliance platform, had raised $500,000 in seed funding led by Vijayan, along with other, unnamed, Silicon Valley-based angel investors.

    More here.

    Connie

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  • Randy Glein of DFJ Growth on Today’s Crazy Late-Stage Market

    117 - imgl3791DFJ, the renowned Sand Hill Road Firm, is celebrating its 30th anniversary this year. At the same time, its low-flying, later-stage offshoot, DFJ Growth, is turning 10.

    This week, we caught up with DFJ Growth cofounder Randy Glein to understand how closely related or not the two remain, how the firm is feeling about the shaky late-stage market, and whether his team of five general partners is ready to raise their own, third, fund from investors. Our chat has been edited for length.

    Quickly, what are you looking for when you’re writing checks? How mature does a company need to be?

    We pick up where venture funds leave off. We’re invest in the scaling phase of businesses, so we’re looking for that inflection point where the company has found its product market fit and customers who are paying for its products. We come in when companies are generating low tens of millions of dollars in annual bookings, growing more than 100 percent a year, and playing in a market that’s big enough to support a large company. That can be $1 billion to $100 billion dollars, depending on the market opportunity.

    Can you invest in a company regardless of whether or not DFJ’s venture team has made an earlier investment in it?

    Many companies we’ve co-invested in with DFJ and not followed. It just depends on the stage of the business. Also, as we’ve raised bigger funds – our first fund closed with $290 million in 2007 and our second closed with $470 million in 2013 — there’s been less overlap. I’d say 25 to 30 percent of our first fund was invested in companies backed by DFJ; in the second fund, it’s less than 10 percent. Our charter is to invest in the most exciting growth-stage companies on the planet, and to go anywhere to find them.

    Do you share the same investors?

    Again, there was more overlap in first fund; with the second fund, less than half the capital is coming from [DFJ’s same investors]. Some LPs want to invest in venture. Some want to invest in growth stage companies because they have a different risk tolerance profile or need to take a different size bite. Some want both and see us as sister funds.

    Are you raising another fund in 2016?

    More here.

    Connie

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