Martin Eberhard sues Elon Musk and Tesla Motors - Page 13

Tdave · 06-17-2009, 12:51 PM

Quote:

Originally Posted by AnOutsider

I don't think anyone here is doubting that Martin is one the founders?

No, but it seems clear that Elon definitely is not. He cannot say that he is one of the founders. He may be the principal investor and owner. But he wasn't even around during the founding.

AnOutsider · 06-17-2009, 01:21 PM

Quote:

Originally Posted by Tdave

No, but it seems clear that Elon definitely is not. He cannot say that he is one of the founders. He may be the principal investor and owner. But he wasn't even around during the founding.

Where has Elon stated he was the founder? Everyone is lashing out at cleverly-worded phrases but are doing the same here...

The law suit shows other publications referring to Elon as the founder. Elon never said he's the founder as far as I know, he's not listed as a founder on the site, and as far as I know he has never said Martin is NOT a founder.

I realize a lot of folks here are from the early days of TM and followed Martin similar to how people follow Steve Jobs, but let's step back a moment and gain some perspective. Too many people are taking this all too personally

I'm here to discuss TM not the highschool drama between EM and ME, if this keeps spilling into every thread, this board will become just as bad as the sucking up people say goes on at the official Tesla forums only on the opposite side.

Chris H. · 06-17-2009, 01:36 PM

Some people wonder how Elon was able to kick Martin out of the company that he had founded. Here's Martin's version of the story (from his blog):

Quote:

Hi Pete,

You said:

“One thing I always wondered about the Martin et al ousting is how did Elon manage this. I would assume the board would have been put together with Martin and the board agreed. Why? I can see Elon wanting to get Martin out I just don’t understand why the board voted to agree with his position.”

My understanding of the situation was that the Board consisted of 7 or 8 members. They included Elon (the Chairman), his brother Kimbal, and then 5 or 6 others who were mostly representatives of the VC firms who invested early in TM. To pass a motion they just needed a simple majority, so 4 or 5, depending on the exact total # on the Board. Some of the VC board members had been brought into TM by Elon, who had led funding rounds series B, C, & D. I guess because Elon was their initial, and main, contact at TM (plus they probably thought he had the “Midas touch”), they were willing to back his decisions. Of course, I don’t know exactly how the vote went down, but that would be my best guess.

It really is disturbing how easily Elon appears to have taken control of the company. Some people may think that he was justified in doing what he did because he invested $50M into TM, but I believe that there is no amount of money that justifies taking somebody else’s idea and trying to pass it off as your own. That’s just plain old fraud as far as I’m concerned. Anyway…

All the best,

Chris H.

Martin sez:

That’s the right idea, but the numbers are different. At the time I left the board, it comprised 8 members:

2 appointed by series A shareholders, where Elon was the majority owner, so they were Elon’s appointees.
1 was the Series B representative, again where Elon owned the majority of the stock
1 appointed by the Series C shareholders, where Vantage Point appointed Jim Marver
1 appointed by the Series D shareholders, where Elon managed to get a very good friend, Antonio Gracias, appointed.
3 appointed by the Common shareholders – one of these defined as the CEO. Marc & I collectively controlled the Common stock class.

In order to get me off the board, Elon converted enough of his Series A stock to Common stock so as to be able to out-vote Marc and me. (He had enough Series A left still to control Series A as well.) He thus controlled 7 out of 8 board seats at the time, while owning less than 40% of the company’s stock.

Comment by Chris H. May 22, 2008 @ 7:19 pm Reply

Once Elon controlled the majority of the seats on the Board, he could do what he wanted, including firing Martin.

Tdave · 06-17-2009, 02:12 PM

Quote:

Originally Posted by AnOutsider

Where has Elon stated he was the founder? Everyone is lashing out at cleverly-worded phrases but are doing the same here...

This is the just the first time I've fully realized the chronology, and how clear it is. While ME may have no case from a strict argument of law, I can sympathize with his plight, and the point he's trying to make.

Arnold Panz · 06-17-2009, 03:09 PM

Quote:

Originally Posted by Tdave

This is the just the first time I've fully realized the chronology, and how clear it is. While ME may have no case from a strict argument of law, I can sympathize with his plight, and the point he's trying to make.

Doesn't this kind of thing happen all the time to the people who create companies -- they come up with a great idea, nurture it, grow it, get VCs involved, and then get sacked because they are perceived as not being able to take the company to the "next level"? It seems here to have been more of a personal dispute between EM and ME than in some other cases, but I recall stories like this every week coming out of the dot coms a decade ago, and it seems to be a fairly common storyline in the technology sector in general.

That doesn't make what happened to ME any more or less fair, but it is the unfortunate reality of starting a business like this one that, in order to get the funding you need to really see your idea reach fruition, you need to essentially sell your idea to others, and then you are more or less working at their mercy from then on. I couldn't believe the amount of money needed to get "green" companies up and running and to scale, as described in this article from this month's issue of The Atlantic.

Rarity · 06-17-2009, 05:55 PM

Yes, it happens all the time. Indeed, it happened once with EM himself, in a somewhat analogous situation. He was kicked out as top guy for PayPal in a boardroom putsch.

Interesting contrast of styles of ME and EM... EM still does deals with those who kicked him out of PayPal. Apparently, he didn't hold grudges.