Martin Eberhard sues Elon Musk and Tesla Motors

[Tdave]

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]

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.]

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):

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]

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]

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]

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.

 

[Chris H.]

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.

Perhaps that has something to do with him having walked away with over $300 million from the sale of PayPal to ebay...

 

[Rarity]

And presumably, ME could walk away from Tesla with $30 million or more.

Tesla Motors Valued at $1B in New Private Equity Marketplace, SharesPost

 

[JRP3]

Or maybe not:

It seems too early to take the share prices and valuations on the just-launched SharesPost as truly accurate assessments of startups’ value

 

[vfx]

The secrets listed here could be talking about Martin

 

[AnOutsider]

The secrets listed here could be talking about Martin

seriously? a bit infatuated are we?

 

[vfx]

a bit infatuated are we?

Nice to see you have seen the light! :biggrin:

 

[dpeilow]

The response: Tesla Says Lawsuit by Deposed Co-Founder Is "Twisted and Wrong"

 

[xcelero.ii]

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.

BUMP!

I couldn't agree more!

I've been purposely staying away from this one.

But just to underscore the point, Elon has never stated he was the founder; and never made a mention that Martin was not. Not to many ways to slice this.

 

[Serge]

BUMP!
But just to underscore the point, Elon has never stated he was the founder;

You may be interested reading this interview at TSC Daily

MUSK: Yes. I'm chairman and principal founder of Tesla Motors ...

or the following one

I happen to remember these interviews, because I commented at the time of reading/watching them. Somebody with better search skills will probably find more instances.

and never made a mention that Martin was not. Not to many ways to slice this.

Promoting oneself as "the principal founder" demotes the co-founders to "two guys hired to build a prototype". Agreed, not many ways to slice this ...

 

[AnOutsider]

You may be interested reading this interview at TSC Daily


or the following one

I happen to remember these interviews, because I commented at the time of reading/watching them. Somebody with better search skills will probably find more instances.


Promoting oneself as "the principal founder" demotes the co-founders to "two guys hired to build a prototype". Agreed, not many ways to slice this ...

Welcome to the forums. Fair enough on the first one (though I think it's cleverly worded, but won't get into that), as for the second I do believe it's been discussed that he said FUNDED and not founded.

My original point stands: this isn't high school, let's align with the company and product not the soap opera that goes on behind it.

 

[xcelero.ii]

My views are NOT directed toward anyone specifically but at the argument as whole. Don't take it in any way personally!


To begin, I'm not even sure the term "principal founder" is one that is widely expressed. For me it makes about as much sense as cheese in a baby's diaper.

Those of us with our switch on, know that you are either the Founder or one of the "Co-Founders".

If the word Principal is being used, you can bet it's being followed by funder and not founder!

And if you are in anyway cultured, you will notice that Elon has a slight accent. And because of this I've even found myself rewinding with the volume up with my ear to the speakers and he is in fact saying funder and NOT founder.

You must also realize that the consistently inaccurate gobs in media have used each opportunity to address Elon as the founder when no document from Tesla or otherwise states he is.

And yes, I agree, he could have corrected them.

But I'm sure anyone who has bothered to Google the word Tesla, has noticed just how many sites--who continue to cover Tesla--flocked at their mistakes and changed the wording around quickly.

My only fault is that Tesla PR and/or EM himself did not find an appropriate way to articulate and address the mistakes and that I can agree upon.

What I can't agree upon is the wishy-washy nonsense about Elon trying to defame Martin. Blah! Wikipedia, Tesla Motors, and everyone else who doesn't just jot down stupid nonsense can see Martin clearly credited for his founding.

I hate no one and wish Martin success because he is quite brilliant.

At the end of the day, it's all just beans. What I want is great cars from a great company with great people!

Hugh! :biggrin: *LOL. I don't know what else to say.*

 

[stopcrazypp]

Welcome to the forums. Fair enough on the first one (though I think it's cleverly worded, but won't get into that), as for the second I do believe it's been discussed that he said FUNDED and not founded.

My original point stands: this isn't high school, let's align with the company and product not the soap opera that goes on behind it.

I do remember him saying principal funder in a couple of interviews. It doesn't seem like he's actively saying he's the founder, but he just doesn't correct people when they say he is. I don't know how liable he'll be for that.

 

[xcelero.ii]

My original point stands: this isn't high school, let's align with the company and product not the soap opera that goes on behind it.

Agreed!...

 

[Brent]

Musk's First Riposte

Tesla Motors - Tesla Leadership