The Uninsured McLaren Crash

Before Tesla and SpaceX, Elon Musk had a very fast car and no insurance on it. The crash that followed is one of the earliest stories about his appetite for risk.

The car

In 1999 Elon Musk sold his first company, Zip2, to the computer maker Compaq, and his share came to about $22 million. For a 27-year-old who had slept in the Zip2 office a few years earlier, it was life-changing money. One of the first things he did with it was buy a McLaren F1, a car so rare that only about 100 were ever built, for close to $1 million. At the time it was widely considered the fastest production car in the world.

The crash

In 2000, Elon Musk was driving the McLaren down Sand Hill Road, the street at the center of Silicon Valley's venture capital world, on the way to a meeting with investors. Peter Thiel, who would soon run PayPal and later back SpaceX, was in the passenger seat. According to the story both men have told, Elon said something like "watch this," hit the accelerator, lost control, and sent the car spinning through the air. Neither of them was badly hurt, and they caught a ride to their meeting. The car was badly damaged.

What it says about how he bets

The McLaren was not insured, which Elon Musk later confirmed. He treated the damage as a story to tell. Eight years later he showed the same tolerance for risk on a far larger scale, when he split his remaining fortune between Tesla and SpaceX to keep both alive.

The bottom line

Elon Musk and Peter Thiel walked away from the spin unhurt. He reportedly had the McLaren repaired and kept it until 2007, when he sold it.