A company desiring to make electric cars has just gone bankrupt in Salinas, California. Why? "Not enough capital," the former CEO says, but let's be real; the federal government, the state of California, and the city of Salinas all poured in a lot of capital to make this work. Moreover, all these levels of government were aiming to subsidize these vehicles; you could pretty much buy batteries and motors off the shelf and have a local welder "sweat" these things together and make a go of it.
So what went wrong? Well, if he couldn't raise capital despite over $700k in government money helping things along, that means one thing, and one thing only; his business plan was really, really, really bad, and private investors wouldn't touch it. It's not beyond guessing that not even the SBA would touch them--and given that entrepreneurs are warned against SBA loans if they can get other financing, this is saying something.
Suffice it to say that California and Salinas taxpayers have yet another reason to give a one finger salute to their elected officials for awarding large amounts of capital to a company arguably without a business plan beyond hype. Hopefully they will in the next election.
Credit where due - I don't hate much, but I do hate hate hate the White House Correspondent's Dinner, the annual masturbatory event in which our grandees show how cool they a...
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