Funding Refused By Paul Elio

[tonyspumoni]

Apple is an excellent example of a dedicated and courageous visionary creating a product - the personal computer - from whole cloth and succeeding. One could easily make the case that Bill Gates at Microsoft did the same. Where Steve and Bill differ from Paul is not in dedication, courage, or vision, but in the massive difference in the level of infrastructure required to execute their respective visions. Steve Jobs and his partner Bill (??) Wozniak built the first Macs in a garage. Even adjusted for inflation their initial capital stake was probably well under $1,000,000. Paul needs at least 200 times that. Not so easy to do which is why we are watching Elio Motors struggle to do it. On this basis alone I'd argue that the innovation Paul has shown in getting as much financing as he has already gotten rivals the innovation shown in creating the Elio.

I'm a pragmatist and while I have a ton of respect for idealism I just want the darn vehicle. If Paul can pull it off and keep total control I'll cheer for him. If he has to make a pragmatic bargain that results in loss of total control but the Elio gets to market, I'll cheer that too.

 

[John Painter]

Really? Then why does it hurt so much when stuff gets on them?????

It's the various muscle and tissue around the eyes which have nerve endings.

 

[pistonboy]

I find the following comment interesting:

"Company insiders have been close-mouthed about possibly selling off some of their privately held shares to raise production funds."

It is in paragraph 5 at:
http://www.thetruthaboutcars.com/2016/08/elio-motors-three-wheeler-7300-sort/#more-1394954

Perhaps current investors have large amounts of stock and are considering selling off some of their stock to enable production.

 

[3wheelin]

Apple is an excellent example of a dedicated and courageous visionary creating a product - the personal computer - from whole cloth and succeeding. One could easily make the case that Bill Gates at Microsoft did the same. Where Steve and Bill differ from Paul is not in dedication, courage, or vision, but in the massive difference in the level of infrastructure required to execute their respective visions. Steve Jobs and his partner Bill (??) Wozniak built the first Macs in a garage. Even adjusted for inflation their initial capital stake was probably well under $1,000,000. Paul needs at least 200 times that. Not so easy to do which is why we are watching Elio Motors struggle to do it. On this basis alone I'd argue that the innovation Paul has shown in getting as much financing as he has already gotten rivals the innovation shown in creating the Elio.

I'm a pragmatist and while I have a ton of respect for idealism I just want the darn vehicle. If Paul can pull it off and keep total control I'll cheer for him. If he has to make a pragmatic bargain that results in loss of total control but the Elio gets to market, I'll cheer that too.

Could it be driven by GREED??? Could PE over anticipating how much money he could make that losing a part or total control of the company is just not in his vocabulary??? , or could it be driven by EGO?? ( Elio...Ego, hmmm) We just don't know the answer to these questions, it's all in PE's mind. Could it be that the price he set to mass produce our ELIO is just does not add up for investors to make any money from, that PE's dream of an affordable means of transportation for the masses nothing more than a dream and not really based on reality? Promising to bring an ELIO to market w/ airbags, a crash rating comparable to a 4 wheel car, a/c, brand new engine and an insanely low price that even an established auto maker dare try....(or maybe just waiting if EM can pull it off). Some think we waited long enough, and there are those that still think that it's not easy for a start up company w/ not enough funding to bring a new car to market....well.. I would agree if they're trying to build a flying car, but a "no new technology trike"??? I just don't know. My 1K was fully committed and my 2491 reservation number, if it means anything has a better than average chance of owning one if EM's production run become limited and short lived. No results from any of the tests, how many hand built e-series has been completed and their time frame to get all things done, the 100 pre-prod that now will start in what...January??? (correct me if I'm wrong), and meeting the 65K reservations does not guarantee the ATVM loan! PE says he have other "potential" source of funding lined up and does not necessary need the ATVM loan...although it'll HELP SPEED UP THE PROCESS to bring the ELIO to production???? How long do we have to wait then if they don't get the ATVM loan??? having said all that, I'm still positive! How 'bout you? It's time for me to hibernate until December hopefully by then, I can get some substantial news rather than the usual EM promotions.

 

[AriLea]

...hibernate until December hopefully by then...

Probably good advise to help with the temperament.
Anyway, EM does have a lot of defined/uncirculated stock. Plenty enough at $20/share if it maintains that price could EM release it to the wholesaler, or whatever. I just don't know what the downsides are to that. It maybe EM just wants to wait until some critical moment, or a push-come-to-shove point. We just don't know. Certainly it could be after the 100 are actually built.

I'm pretty sure all visible changes to funding are now waiting for the LA-Auto Show, and the viewing of the 'Iron-Sides' version of the Elio. Then the 65k reservations to be completed. And likely the 23 to be built and even tested, absolutely including the MPG rating. Only then (plus a few weeks) would the ATVM possibly come into play.

If nothing happens with the ATVM after that, then possibly the full completion of the 100 will be required before EM takes steps towards those alternative funding paths he has up his sleeves. I hope it doesn't come to that, it's likely to have some drawbacks that are inconvenient to freely operating a start-up automaker.

 

[RonnieB]

We will just have to hold on for now and see what happens. I myself would think that they should be able to get investors to spend 200 million on a project like this so it makes sense that it my be a PE Control thing. With Obama getting out of office soon the government my push the ATVM Loan out to Elio as part of the green energy movement. Time will tell but for now just like many of you I just want my Elio

 

[Made in USA]

I was told last year that complete funding had been offered but refused by Paul Elio because the investor wanted too much control over the company. The following post, in my mind, confirms it.

http://www.elioowners.com/threads/elio-in-greenbelt-md-may-18-2015.6074/

Page 1, post #8, item #4.

I do not believe the real problem is funding as we have been lead to believe, but rather the problem is control. Apparently funding is available if investors are allowed to share control in the company as is customary and reasonable. What is not available, is funding from investors who will let Paul Elio have complete control over the company.

How many times has funding been turned down by Paul Elio because he must have complete control? We would probably be having our vehicles on time if he did not insist on complete control.

It is completely reasonable and customary for investors of millions of dollars to expect a share of control in the company they are funding. What is unreasonable is for Paul Elio to expect them to give him funding without giving them part of the control. Perhaps he is afraid they would overrule him and not permit the elgin gauges. They would have that power and I am sure they would exercise it.

Paul Elio does not have much money to personally invest. He has said he was desperate a few years ago and applied at Starbucks and eventually worked as a roofer. Since that time, he has worked as a CEO of a startup company that has only borrowed money and produced no profits. I am sure his salary as CEO is not large. Again, Paul Elio does not have much money to personally invest. I suspect the investors attitude is something similar to ‘You want to completely control the millions of dollars we put at risk while you put only a few thousand dollars at risk?’ If the company went under, the investors would lose millions of dollars. What would Paul Elio lose?

I have always wondered why investors are not flocking to fund such a great idea. Now, I believe I know why. NDAs (nondisclosure agreements) are great for not letting the public know what is happening in funding discussions. I suspect Paul Elio insists on them. I am sure he does not want reservationist to know the reason they are not getting their vehicles is because he will not share power.

How does someone get the money for a company and maintain complete control? Government loans might be a way. The government loans the money but does not step in to tell the company how to run its day to day business. Crowd funding is another way. Crowd funding will consist of many small investors who probably are not investment savvy and for the most part will follow Paul Elio and let him make the decision.

Paul Elio is a smart engineer. He is a smart business manager. Now it looks like he is a smart finance officer. He may be able to pull this off. But then again, maybe not.

The Elio vehicle is a great idea. The Elio vehicle may rank with the Ford model T and the Volkswagen Bug. Europe’s approach to the economy problem is the Smart car. With great pride, I will point to the Elio vehicle as my country’s solution. However, I am not interested in making Paul Elio a mega millionaire nor one of industries’ movers and shakers. History remembers kindly the people who are creative, but less so the more wealthy or powerful they become.

However, right now, I simply want my vehicle. I do not like it being put into jeopardy because Paul Elio has a control issue.

Thought I would restart this topic as it is still pertinent. Note the 2015 date. Expand the quote or go to page one of this topic.

 

[AriLea]

I would think at this point something must be fundamentally different from Jun 2015. Either Paul is still too optimistic or said investors are no longer as generous. You would think a compromise could have been reached by now.

If I were a money motivated investor, I would let the Elio go into a recovery state, pick it up and offer the Elio at a higher profit margin, but still in the attractive range of affordability, say above the price of the cheapest 4 wheeler. And then later drop to just below.

But then too I'd move quickly into a EV version at double the price and sell both. But that's me. BTW new battery tech seems close. I'll post in another thread.

 

[RSchneider]

If I were a money motivated investor, I would let the Elio go into a recovery state, pick it up and offer the Elio at a higher profit margin, but still in the attractive range of affordability, say above the price of the cheapest 4 wheeler. And then later drop to just below.

The cheapest 4 wheeler is the 2020 Chevy Spark. That's $13,220. With just over 21K priced at $5500 ($7K locked in, $1K already spent and $500 discount) then this isn't counting the $7300 locked in with their discounts and deposit already being paid. Elio has an ironclad contract that they must sell those at the stated prices in the SIL listed. This is why I can see why you mentioned bankruptcy. Only way to get out of that deal. Then they can reprice it realistically. It wold be called something else (i.e. the Stu) and then offer the reservation holders some tiny deal (i.e. pay a 15% discount from the new price and keep the SIL). Reservation holders will not like it, but a new company does not have to honor those contracts.

 

[AriLea]

I can see why you mentioned bankruptcy.

Not that I like the idea. I prefer honor above money. So I'm not money oriented.

As for me, I'd be forgiving if they just gave me that 15% discount plus honored my deposit. A good percentage of depositors probably would. But of course, a savvy investor will only do that if there was a huge difference in the PR result. I think 30% (or an 'at cost + 5%' pricing for the 60k buyers) probably would do that quite well. But alas, no, they wouldn't.