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Social Chat - Short Term TSLA Movements
- Thread starter Jonathan Hewitt
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Also, part two mentions Elon joining Tesla Motors in 2004. Elon probably won't be happy about that as a 'cofounder'
It's true though, he's done enough to be considered a cofounder and was there early enough, but the company was indeed started without him.
Correction: the company was started with Elon's money so technically the company was not "started without him."
RobStark
Well-Known Member
Technically, from Wiki
Tesla Motors was incorporated in July 2003 by Martin Eberhard and Marc Tarpenning, who financed the company until the Series A round of funding. Both men played active roles in the company's early development prior to Elon Musk's involvement.Musk led the Series A round of investment in February 2004, joining Tesla's Board of Directors as its Chairman.
And here You can hear it from Tarpenning. Very good presentation btw and a must see for every Tesla fan...
Amplify Mentor Event: Marc Tarpenning (Tesla) - YouTube
Amplify Mentor Event: Marc Tarpenning (Tesla) - YouTube
This is from this article:
"Elon Musk: ... And so in 2003, I actually had lunch with one of the other cofounders of the company JB Straubel (now CTO of Tesla Motors) who was actually working on a hydrogen airplane or something. He mentioned to me the tzero car that was done by AC Propulsion. AC Propulsion are the sort of guys who had actually been on the EV1 program and they took a gasoline sports car, a kit car and outfitted it with lithium ion batteries, consumer grade cells, and they created a car which was essentially the precursor of the (Tesla) Roadster, and had very similar specifications: sub 4 seconds zero to 60 mph, 250 mile range and also a two-seater sports car. But it was quite primitive. It didn’t have a roof for one thing. At all. And none of them had doors. But it didn’t have any safety system at all, no air bags, it wasn’t homologated, so you couldn’t sell it. So in order to sell that car, in order to create a commercial version of that car, there was a fair bit of work that was required.
I kept trying to get AC Propulsion to commercialize the tzero, and I said: ‘Look, I’ll fund the whole effort, we really need to do this.’ But they just refused to do it. They wanted to make an electric Scion. Which in principle sounds good, but in fact it would have cost $75,000 and nobody wants to buy a $75,000 Scion. The technology was just not ready. There was just no way to make a good value proposition.
Alison van Diggelen: What was it that compelled you to say: ‘I have to be CEO here and lead this company.’ Why not just say: ‘I’ll help you JB and get this rolling’?
Alison van Diggelen: What was it that compelled you to say: ‘I have to be CEO here and lead this company.’ Why not just say: ‘I’ll help you JB and get this rolling’?
Elon Musk: Well I really didn’t want to be CEO of two companies. I tried really hard not to be actually. Yes. So AC Propulsion finally said…I told AC Propulsion: ‘If you’re not going to do this, I’m going to create a company to do this.’ And they said well, there’s some other guys who’re also interested in doing that and you guys should combine efforts and create a company. And that’s basically how Tesla came together. And then we had a lot of drama (laughter). But since I’d provided like 95% of the money, so I could have been the CEO from day one… but I really didn’t want to be CEO of two startups at the same time. It was not appealing. And shouldn’t be appealing by the way, if anyone is thinking that’s a good idea. It’s a terrible idea."
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Here's an excerpt from another article:
ABG: Why don't we start with how you got involved with Tesla to begin with.
Elon: So, the way I got involved was in 2003, I think it was in September or October, I had a lunch with JB Straubel and Harold Rosen. Harold Rosen was kind of a space guy, Harold had a space background and a car background. He was with Rosen Motors. But before that, he was an engineer at Hughes and he came with a number of innovations for the early geosynchronous satellites. So, he kind of had, like me, a combination of space, and electric car interests. So Harold called me up out of the blue and wanted to have lunch and brought along JB Straubel. And during lunch, he talked about space stuff, and he talked about electric car stuff because I had mentioned the reason I first came out to California was to do a Ph.D. at Stanford in a higher density capacitors to use in electric vehicles. And we talked about lithium ion and what that meant for electric vehicle range. The EV1 had a range of about 120 miles or so with Nickel Metal Hydride and so if you did a direct substitution of lithium ion for nickel metal hydride, which has directly 2x the energy density you get to around a 240-250 mile range, which would be acceptable to people. JB mentioned that there was this company, AC Propulsion, that had actually put together this electric sports car, which did in fact deliver range of that order and acceleration from 0 to 60 under 4 seconds.
So, he offered to introduce me to Tom Gage, the guy from AC Propulsion, which he did, and Tom Gage came by and gave me a test drive with the tZero , I said, "wow, this is really awesome." This is exactly what I thought should be done and I tried to buy one. He wouldn't sell it to me and I said, "Look, you should really go into production with this thing, productize the tZero. But they didn't want to do that. I don't know if you're familiar with AC Propulsion...
ABG: I'm familiar with them and I've talked to Martin previously about AC Propulsion as well.
Elon: Yes, so anyway, I tried at length to get AC Propulsion to at least make me one bloody car, even if they wouldn't go into production with the thing, but they wouldn't do it. I even tried to get them to convert my Porsche to electric, and they wouldn't do that either. And in addition, after bargaining for a bit, Tom Gage said, "Well, you know, we aren't interested in doing that but there are these three guys who are and said, "Do you want to meet Martin (Eberhard), Marc (Tarpenning) and Ian (Wright)." I said, "Sure."
This is actually very similar to the path that Eberhard himself took before launching Tesla. When we spoke to him last year he also discussed being inspired to start Tesla after AC Propulsion declined to produce the tZero. In essence the true stimulus for the creation of the Tesla Roadster might have been Tom Gage and his resistance to following the path that Eberhard and Musk ultimately took.
So Tom gave Martin and Ian my card and they came by SpaceX and gave a presentation. Well, there are a few things that I disagreed in what they showed. I wanted to have a company-owned sales and service infrastructure, they wanted a dealership infrastructure. And I didn't want to be a niche sports car company. I wanted it to be something that would aim for the mass market as soon as possible. So it's a sports car at the intro, but we wouldn't stay there; we'd go mass market as soon as possible.
Those were the two big changes that I had. Apart from that... I said let's move forward and create a production version of the tZero. So I provided essentially, all of the Series A funding. There wasn't any Tesla Motors at that time.
This was in March/April 2004. According to Eberhard, Tesla Motors had been incorporated on July 1, 2003 but it consisted only of himself, Tarpenning and Wright at the time. None were drawing any salary.
It was just basically Martin, Marc and Ian working part-time and a sort of business plan that was a kind of a weak business plan actually. That's all Tesla Motors was when I invested. I provided essentially entire Series A round, over 90 percent of it. There were a few small VC investments and a few small individual investors.
So, to kick things off, that's how things started off with AC Propulsion and basically, from my standpoint, it's started off with a conversation with JB Straubel , who by the way, a few months later called me up and said he's thinking about joining Tesla and had wanted to know if I thought it was a good idea. I said, "Well, definitely because I'm investing in it. So JB joined and became Chief Technology Officer and was really the key guy responsible for developing the differentiated technology.
Eberhard confirms that Straubel was hired as a Drivetrain Engineer about one month after the Series A funding closed and was employee 6 or 7. Straubel contributed to the development of the powertrain from the original AC Propulsion design. Straubel wasn't promoted to Chief Technology Officer until a year later after managing the design and construction of the dynomometer used to test Tesla's powertrain.
Elon: So, the way I got involved was in 2003, I think it was in September or October, I had a lunch with JB Straubel and Harold Rosen. Harold Rosen was kind of a space guy, Harold had a space background and a car background. He was with Rosen Motors. But before that, he was an engineer at Hughes and he came with a number of innovations for the early geosynchronous satellites. So, he kind of had, like me, a combination of space, and electric car interests. So Harold called me up out of the blue and wanted to have lunch and brought along JB Straubel. And during lunch, he talked about space stuff, and he talked about electric car stuff because I had mentioned the reason I first came out to California was to do a Ph.D. at Stanford in a higher density capacitors to use in electric vehicles. And we talked about lithium ion and what that meant for electric vehicle range. The EV1 had a range of about 120 miles or so with Nickel Metal Hydride and so if you did a direct substitution of lithium ion for nickel metal hydride, which has directly 2x the energy density you get to around a 240-250 mile range, which would be acceptable to people. JB mentioned that there was this company, AC Propulsion, that had actually put together this electric sports car, which did in fact deliver range of that order and acceleration from 0 to 60 under 4 seconds.
So, he offered to introduce me to Tom Gage, the guy from AC Propulsion, which he did, and Tom Gage came by and gave me a test drive with the tZero , I said, "wow, this is really awesome." This is exactly what I thought should be done and I tried to buy one. He wouldn't sell it to me and I said, "Look, you should really go into production with this thing, productize the tZero. But they didn't want to do that. I don't know if you're familiar with AC Propulsion...
ABG: I'm familiar with them and I've talked to Martin previously about AC Propulsion as well.
Elon: Yes, so anyway, I tried at length to get AC Propulsion to at least make me one bloody car, even if they wouldn't go into production with the thing, but they wouldn't do it. I even tried to get them to convert my Porsche to electric, and they wouldn't do that either. And in addition, after bargaining for a bit, Tom Gage said, "Well, you know, we aren't interested in doing that but there are these three guys who are and said, "Do you want to meet Martin (Eberhard), Marc (Tarpenning) and Ian (Wright)." I said, "Sure."
This is actually very similar to the path that Eberhard himself took before launching Tesla. When we spoke to him last year he also discussed being inspired to start Tesla after AC Propulsion declined to produce the tZero. In essence the true stimulus for the creation of the Tesla Roadster might have been Tom Gage and his resistance to following the path that Eberhard and Musk ultimately took.
So Tom gave Martin and Ian my card and they came by SpaceX and gave a presentation. Well, there are a few things that I disagreed in what they showed. I wanted to have a company-owned sales and service infrastructure, they wanted a dealership infrastructure. And I didn't want to be a niche sports car company. I wanted it to be something that would aim for the mass market as soon as possible. So it's a sports car at the intro, but we wouldn't stay there; we'd go mass market as soon as possible.
Those were the two big changes that I had. Apart from that... I said let's move forward and create a production version of the tZero. So I provided essentially, all of the Series A funding. There wasn't any Tesla Motors at that time.
This was in March/April 2004. According to Eberhard, Tesla Motors had been incorporated on July 1, 2003 but it consisted only of himself, Tarpenning and Wright at the time. None were drawing any salary.
It was just basically Martin, Marc and Ian working part-time and a sort of business plan that was a kind of a weak business plan actually. That's all Tesla Motors was when I invested. I provided essentially entire Series A round, over 90 percent of it. There were a few small VC investments and a few small individual investors.
So, to kick things off, that's how things started off with AC Propulsion and basically, from my standpoint, it's started off with a conversation with JB Straubel , who by the way, a few months later called me up and said he's thinking about joining Tesla and had wanted to know if I thought it was a good idea. I said, "Well, definitely because I'm investing in it. So JB joined and became Chief Technology Officer and was really the key guy responsible for developing the differentiated technology.
Eberhard confirms that Straubel was hired as a Drivetrain Engineer about one month after the Series A funding closed and was employee 6 or 7. Straubel contributed to the development of the powertrain from the original AC Propulsion design. Straubel wasn't promoted to Chief Technology Officer until a year later after managing the design and construction of the dynomometer used to test Tesla's powertrain.
So, it looks like Tesla Motors was incorporated on July 1, 2003 prior to Elon's involvement but it basically consisted of just a few people working on it part-time and a business plan. I'm doubtful that much money was spent prior to the Series A, as if a significant amount was spent (ie., over a few hundred thousand) then those investors/founders would have accrued a decently large % share in the company, which doesn't seem to be the case.
RobStark
Well-Known Member
Yes, Tesla was a small time "Garage Company" before Elon's involvement.
After Series A the split was probably 60% ownership for Elon 15% Martin and 15% Marc.
And their percentage ownership kept shrinking with each new round of funding.
And they sold their shares during the IPO. But Martin and Marc are the founders.
I highly doubt that Martin and Marc had 15% of the company each after the Series A. My bet is that if Elon invested 95% of the Series A and before that it was just 3 people part-time, then this is how the ownership would look like:
85+% Elon Musk
3-5% Martin
3-5% Marc
3-5% Other
A "founder" is not just someone who was there technically at the beginning of a company's incorporation. A founder is someone who has both ownership and has an integral part in growing the company past infancy. Anyone who invests 95% of the early funding in any company is a founder since their role is integral.
RobStark
Well-Known Member
70/30 split is typical for Silicon Valley between VC and founders.
Elon was not the only VC,90% but not all of it.
If you give the original founders only a tithe there is no real incentive to start a company.
A founder is someone who is there at the inception of the company and has the original idea for a product or service.
An electric car using off the shelf computer batteries, electric motors and other parts where Marc and Martin's idea.
Every one was aware that automobiles is a capital intensive business. Even small scale electric automobile business.
They knew future funding would be necessary and that percentages for the original owners i.e. founders would get smaller.
5% would get widdled to nothing rather quickly.
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My main point is that Elon, JB, Martin and Marc can all be considered co-founders of Tesla Motors. Again, just because a person had an idea or was at the incorporation of the company doesn't mean they have a more important role than a person who comes on several months later but plays a hugely crucial role in jumpstarting the company.
Regarding VC funding, it's different in every case and dependent on many variables. In Elon's version, it was joining of two teams (Elon, JB) and Martin/Marc (who had already incorporated but were working on it part-time). And with Elon's funding injection, they were able to jump to a Series A round (skipping a typical seed round). With Elon bringing in 95% of the initial capital (according to the interview above) and bringing in JB Straubel as a co-founder as well, he's likely going to divide things up where JB gets a decent share as well. However, if you look at JB's ownership of Tesla it is quite small (much less than 1%). Further, if you look at Tesla's IPO filing, Martin Eberhard and Marc Tarpenning are barely mentioned... this leads me to believe they did not have significant shares/ownership prior to Tesla's IPO in 2010. If you combine JB's ownership stake, combine that with Tesla's IPO filing and absence of Martin and Marc's shares, and also add in Elon's disproportionate stake in the early funding rounds, it's leads me to believe that Elon has a disproportionate stake in Tesla from the very beginning (ie., 85+%) and that is the main reason why he was able to keep his ownership stake through all the dilution at a significant 30%.
Interesting discussion. My take on this is that many people had an idea of making bev, many people did make workable models, including some TMC members. But to take an idea and to turn it into a disruptive business is a completely different skill, and there are fewer individuals that can do that.
Most investors can recognize the added value of these rare individuals to the business that they lead. It is no wonder that most investors are very concerned with Elon leaving Tesla but many do not even know who the original founders were.
Most investors can recognize the added value of these rare individuals to the business that they lead. It is no wonder that most investors are very concerned with Elon leaving Tesla but many do not even know who the original founders were.
Lots of semantics here. I've spent the last 20 years in the valley working on start ups and have grown to appreciate that depending on the situation a "founder" May or may not be integral to the business. I would suggest that whatever EM is to the business with regards to founder status pales in comparison to what he has become to the fundamental success of the business.
it has become clear with Elon's recent interviews that even when he steps down from CEO he will always have an integral role in the company. I hope that JB steps into the role or some other very capable person after Gen 3 so Elon can start his VTOL battery powered Jet or take a more active role in making the Hyperloop a reality.
Or maybe after Gen 3 platform is up and running we can crowd source the funding for the Hyperloop from TMC members
Or maybe after Gen 3 platform is up and running we can crowd source the funding for the Hyperloop from TMC members
+1 ... They could of done it with taste ... mentioning that he bought a 1 million dollar toy the overall tone of part 2 were ridiculous .... I feel if done in a different manner a large Elon donation would have been very likely ... it might still be but It turned me off to the whole project (under current .... management)
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I read that exact same line as definitive proof that demand in NA is increasing and a complete non - issue unless the issue is the ever present need to make more cars to satisfy the completely organic demand. Word of mouth is called the best advertising because it is free. It will be a much easier sale when there are commercials on T.V. letting the world know how insane this car is. Once that starts there will be much more of the free word of mouth advertising we have now.
You think there is some issue here they are hiding but that is clearly not the case. Cheers and happy investing.
Edit: I think any trouble they had forming sentences was related to them being in disbelief that they were getting these questions instead of questions about the ~500,000 square foot facility they just leased. 1. What is it? 2. Why not use Fremont for that? 3. With reports of Fremont being almost 50 percent used do you still think the factory will be able to match output when it was run by Toyota/GM
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mershaw2001
I'm short the short sellers
Muskol
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