Exclusive – Musk's Boring Co. Pushes Investors for Recruiting, Business Help

Elon Musk’s tunneling startup, the Boring Company, made an unusual demand of some investors in its latest funding round: If they wanted in, they had to help build the business.

The company has told some investors that participated in the round that they would have to help recruit Boring employees or assist with business development, such as making introductions to government officials in places where the company might build tunnels, according to people familiar with the matter.

The Boring Company, which builds machines that it claims can dig underground more cheaply than traditional construction firms, recently closed an investment round that values the company at around $20 billion, the people said.

It has described to prospective investors some of the roles it is seeking to fill, the people said. If they fail to provide viable candidates for such jobs, The Boring Company has the right to buy back some of their shares, they said.

The company didn’t respond to requests for comment.

The stipulation demonstrates the pull that Musk has with investors eager to put their money behind the tech billionaire, who also runs Tesla and SpaceX. SPCX 6.42%increase; up pointing triangle Many private-market investors view investments in Musk’s orbit as a sure bet and are willing to go to great lengths to participate in funding rounds.

Musk’s rocket company SpaceX went public in June in a record-setting IPO that raised $86 billion from Wall Street and delivered a windfall to investors. Its market cap nearly doubled immediately after the public market debut. Shares are down about 7% since the IPO.

Spun off from SpaceX in 2018, the Boring Company owns a transportation network under the Las Vegas Strip and has pitched projects in cities including Baltimore, Chicago and Los Angeles. It has a new loop under development in Nashville, which it is privately funding.

The company announced a new project to create an underground loop in Dubai earlier this year, saying the first four-mile phase would cost $154 million and take a year to complete. A second phase—expanding the route to 14 miles—is expected to take three years and cost $545 million.