Owner of FedEx gambled company's last 5k to keep doors open (1971)...

quote:

---

In 1971, Fred Smith founded the company with $4 million of inheritance and $80 million in loans and equity investments. FedEx started out with eight planes, covering 35 cities, and it had plans to add more each month.

But in the first two years, primarily due to rising fuel costs, the company found itself millions of dollars in debt and on the brink of bankruptcy. Even worse, Smith's vital pitch for funding to the General Dynamics board was rejected.

---

quote:

---

When FedEx's funds dwindled to just $5,000, Smith realized he didn't have enough to fuel the planes. The company had already gone to many extremes, from pilots using their personal credit cards to fuel planes to uncashed paychecks.

So what's a desperate founder to do? Smith impulsively flew to Las Vegas and played blackjack with the last of the company money.

Amazingly, when he came back the next week, he had turned the remaining $5,000 into $27,000 — just enough for the company to stay in operation for another week.

---

quote:

---

Roger Frock, a former senior vice president of operations at FedEx, describes the scene when he found out what Smith did. "I said, 'You mean you took our last $5,000 — how could you do that? [Smith] shrugged his shoulders and said, 'What difference does it make? Without the funds for the fuel companies, we couldn't have flown anyway.'"

---