I understand the article just fine.

That does not change the fact that the full costs of Falcon 9 plus a crewed Dragon will not cost taxpayers a billion bucks.

BTW, here’s a link to the article you posted (no doubt violating copyright) but didn’t feel like providing a link to.

Rand Simberg, I don’t think you understand the article, it says that “SpaceX needs a billion.” Even if it were true (and other commentators here imply that the author may not be trustworthy), currently SpaceX is only linked to taxpayers under COTS-D (money yet to be delivered) for about $300 million. That is the total cost to finish developing COTS-D. Now a crew transportation contract to the ISS could well be in the billions, over dozens of flights over several years, and on the post-launch news conference Elon implied that they’d really need some kind of contractual assurance.

I think the markup coming this month will be more telling than this request.

The “billion for an LES” number apparently came from ATK (which was spreading FUD), not SpaceX.

“Space entrepreneur Elon Musk made history last week with the successful launch of his Falcon 9 rocket, but he has acknowledged that he worried a few years ago that his project would have to shut down for lack of cash.

The story of how Mr. Musk’s start-up, Space Exploration Technologies Corp., managed to buck financial turbulence—at one point even flirting with Northrop Grumman Corp. about a possible partnership—underscores how risky privately funded space endeavors can be.
Friday’s nearly flawless flight, which blasted a prototype crew capsule into a 155-mile orbit, opened what is likely to become a new chapter in manned space exploration. The Obama administration wants NASA to outsource cargo and astronaut transportation to the international space station through at least the next decade.

Mr. Musk, along with several competitors, is expected to vie to handle much of the National Aeronautics and Space Administration’s manned space program. President Obama believes his approach will both save money and spawn a vibrant U.S.-based space industry. But Congress has stalled the plan, and some critics say that portions of it amount to a back-door bailout of companies like Mr. Musk’s.

Mr. Musk’s closely held company still needs a cash infusion of more than $1 billion in the next year or two to reach its goal of transporting astronauts to the international space station later this decade. That’s twice the total investment by SpaceX, as the company is known, since its creation in 2002. And while Mr. Musk tapped his own fortune for some $100 million of that, U.S. taxpayers are the most likely source of future assistance.

In an interview in March, the 38-year-old Mr. Musk, SpaceX’s brash founder and chief executive, recalled the serious cash squeeze the company confronted repeatedly from mid-2007 to mid-2009. Describing the intense pressure as “the worst two years of my life,” he said there were “certainly many times when we were not far from running out of money.”

Mr. Musk made his fortune when he sold his Internet company, PayPal, to eBay Inc. Since then, he has invested heavily in two projects, SpaceX and the electric-car company Tesla Motors Inc.

At SpaceX, rocket development and other costs kept climbing, partly because the Air Force refused to allow the fledgling outfit to launch from Florida, forcing it to ship fuel, parts, machinery, employees and other gear to Kwajalein, an isolated Pacific atoll 2,500 miles southwest of Hawaii where U.S. missiles have been tested for decades.

Throughout this period, SpaceX’s image and prospects were reeling from three consecutive botched launches of the smaller Falcon 1 rocket, including one attempt that never got off the pad. Prospective customers, from Pentagon brass to foreign governments and scientific organizations, were reluctant to sign contracts with SpaceX. Add to that the collapse of the overall economy, and “it was pretty tough slogging,” Mr. Musk recalls.

As the summer of 2008 rolled on, he mulled exchanging a minority stake in SpaceX for a swift financial lifeline. And by early August, according to people familiar with the details, he had already engaged in preliminary but ultimately unsuccessful talks about teaming up with Northrop. Northrop and SpaceX officials have declined to comment.

That month, Mr. Musk did agree to sell a sliver of the company to Founders Fund, a private-equity group run by some long-time business associates. Later, he sold a similar stake to the venture-capital group Draper Fisher Jurvetson, another Northern California venture-capital group. In the March interview, Mr. Musk said, “it was never my intention to take outside investments” but “I simply didn’t have the money to put in.” The two funds, and three other investors with smaller stakes, together have a 20% stake in the company.

Then, at the end of 2008, SpaceX won a competition to snare the largest share of NASA’s planned cargo flights to the space station. And in July 2009, the crisis finally eased when SpaceX successfully launched a satellite for the Malaysian government.

But Mr. Musk’s ambition to eventually make space travel routine for average people may make it difficult to find additional private backers. “Some of those [goals] may not sit well with investors who are looking at next quarter’s profits,” he concedes.

Mr. Musk essentially taught himself rocket science, and he bristles when critics snipe at him for taking the title of chief technical officer at SpaceX. He likes to recount that when he took an engineering aptitude test as a youngster, he “got the highest score they had ever seen” in his native South Africa.

One of the worst mistakes many companies make is separating the technical experts from the executives who control the purse strings, he says. “I understand both, so I can make decisions very quickly,” he adds. “They mostly are the right decisions.”

Still, Mr. Musk’s self-confidence, combined with some slipups, contributed to the cash crunch at SpaceX. When the company and NASA started discussing potential manned missions for Falcon 9, Mr. Musk boldly predicted he could provide reliable crew-escape hardware for less than $350 million, a projection that was ridiculed within the industry. “That was, in retrospect, naively low,” Mr. Musk now concedes.

Since President Obama has asked Congress to fund commercial manned flights, SpaceX has recalibrated its estimate, saying it needs about $1 billion to develop and deploy an emergency escape system.

Looking back on some of SpaceX’s dark days now, Mr. Musk recalls how stress related to his divorce and to taking on more day-to-day responsibilities running Tesla, where he is the controlling shareholder, increased the crisis atmosphere.

But running both companies simultaneously also provided the ultimate test of Mr. Musk’s renowned tenacity and focus. “The sheer amount of work,” he said in March, “was way beyond fun.”

In the afterglow of Friday’s success, though, Mr. Musk didn’t dwell on past struggles. He told reporters his team intended to “drink a few margaritas, [and] maybe more than a few,” to celebrate. “I couldn’t think of a better reason to have a party,” he added.” – source, Andy Pasztor, WSJ 6/7/10