E-mail from Simon to Roman Muljar
An attempt to find to find an amicable resolution after Muljar poached is design team and likely made off with his investment. This overture was later met with an assault and threats of greater violence.
Sent: 13 November 2019 17:14
To: Roman Muljar
Subject: Eroll and Nobe Cars
Further to our two calls on Mon 11th November, and the one we had earlier this year, let's discuss a positive and agreeable way forward from the current situation which is entirely unacceptable. This is a lengthy email as there are many areas and thoughts to cover from both the perspectives of Eroll and Nobe and our respective involvement in them.
To recap Eroll first - I saw this in London at 100% Design in 2014, 5 years ago. I followed up with a trip to Tallinn in early 2015 where I rode the product, met the team and discussed their impressive ambitions and vision. I was highly impressed by what they had achieved with such limited resources. I also saw the potential of this small startup where it could help bring affordable, smart, electric, micro-mobility to a world market in the early stages of a mass conversion to clean energy mobility. We have seen what Tesla has achieved with high-priced vehicles - a market capitalisation of $63bn, which is more than BMW - $45bn. What could Eroll achieve where most of the world can only afford two wheels (car ownership among India's 1.4bn people is just 8% for example)?
For reference, Eroll's holding company is Atlas Partners OU where 3 people had a third of the company in 2015:
Ivo Ustav - Estonian policeman
Meelis Merilo - Estonian owner of IT company www.sandfox.ee
Juhan Bernadt - retired, Swedish nationality, based in Tallinn
Many Skypes took place between the four of us in 2015/2016 despite me having no formal links with the company, no NDA being signed and no investment having been made. Our communication was based on a mutual interest and passion in seeing Eroll get to production after many years in development and the need for the world to convert to electric vehicles.
In 2017, I revisited Eroll, having sold my house in London, where I made a second due diligence visit to Tallinn. Juhan was not available to meet them so I spent a few days with Ivo and Meelis. This included a visit to Meelis house to see Eroll's being made in his garage. Following the visit, and a lot of questions about their desire, motivations and ambitions. I decided to invest in Eroll and help the team make a big difference in the world of micro-electric mobility. We negotiated that I would have 25% of the shares and the existing shareholders above would reduce from 33.33% to 25%. Therefore, the four of us each had equal interests with a quarter of the Atlas Partners OU, which holds the assets, IP, brand etc of Eroll. My funds were paid into Atlas Partners OU bank account in Summer 2017.
Crucial to my investment being made was the promise to make London the commercial HQ of Eroll where Tallinn would remain a centre for design, R&D and prototyping - in other words, what had been done to date to get Eroll started, would remain there to a large degree and London would focus on activities to allow Eroll to go from a single garage to a global audience. This mega-city is home to 8 million people vs Estonia's 1.3m in total. A UK base would provide an important place in which to find commercial partners, initial customers and vital funds through sophisticated investors. The UK nation, with 65m people would also provide a critical mass of cities, urban mobility needs and new innovation capacity to where Eroll's could be positioned in the mass switch to electric mobility during the 2020's. The UK is also home to the Commonwealth of Nations which are 2.4bn of the world's 7bn. Other Estonian success stories, namely Skype and TransferWise, also quickly moved from Tallinn to London.
My role was not as a passive investor where I just sit back and get updates of what is happening from time to time. It was agreed that I would help Eroll with sales, business development, marketing, events, partnerships, finding investors, design input etc. In a small team, each person is vital, having multiple roles to fulfill. My main contact for this is Juhan as he has a somewhat similar background whereas Meelis is more a technical person. The skills that I have were all of interest and vital to Eroll's success. Local efforts to establish sales, investors etc for Eroll seem virtually non-existent so whatever is done in the UK is even more important.
During the investment process, nothing at all was mentioned about the team's involvement with Nobe Cars. In fact, I was not aware of the Nobe project at all until recently. I took interest in it because, like Eroll. It is Estonian and also an eye-catching, unique design that looks interesting and different. I read with great surprise though that Meelis was positioned in Nobe as your Co-Founder?! Why had he failed to mention this crucial involvement and what were the implications for both Eroll and Nobe? I also saw Eroll and Nobe are both being produced in the same garage. In one way shared synergies, but equally a huge conflict of interest and IP transfer.
As I see it, you have effectively convinced Meelis to take time, effort and energy away from Eroll to do your project - Nobe. You positioned him flippantly as merely some technical help you had paid on a daily basis for his help. This is completely incorrect as without Meelis, Nobe cannot get easily prototyped and built for a reasonable cost. You are very much a double act. In fact, I cannot tell who is the real founder - you or Meelis?
If I had successfully managed to raise the €2m Eroll needed to go from prototype to production, any investor in Eroll would be completely outraged if they subsequently found out the key technical person is involved with another unrelated EV project. It is only related in the fact that Meelis has interests in both - but investors do not. This a massive failure to have full transparency, disclosure of information and mistreats investors in Eroll.
If Nobe Cars also goes off to raise €2m, do you think they want to have Meelis messing around with Eroll? No! Especially if he fails to mention this upfront and the investors then find out only after they have given you the funds. In a word, this is nonsense as it's a conflict of interest - unless Eroll and Nobe have links in the form of common ownership or a partnership agreement that is transparent and understood by both sides.
On your side, you raised c.€250k from the Swedish equity crowdfunding website FundedByMe. Those investors you convinced saw Meelis being pitched as a Co-Founder - but had no idea he is also involved with Eroll and has responsibilities and duties to me as an Atlas Partners shareholder. You mentioned that the three Atlas Partners also had no obligation to retain my share purchase funds within Atlas/Eroll - it is blindingly obvious that if I pay it into Atlas Partners bank account, I am not expecting the three of them to have a pay day where they run around and blow all the money I just gave them. That is tantamount to pure stupidity and recklessness if they can't be disciplined enough to re-spend the capital on getting Eroll into production. It says they just wanted to recover the costs they all incurred in Meelis garage over the last 10+ years and had no serious intent on getting this to a street-legal, sellable product status.
At present, it is Startup Week Tallinn and they have not even engaged the local community to take part in this series of events to make an impression with local media, investors, government officials, international visitors etc.
Let's go back to my expectations as an investor in Estonia - helping local entrepreneurs to realize their long held dream: regular communication with the full team, updates on the technical side, production plans, certification, software, hardware, batteries, recharging stations, funding needs, marketing plans etc etc. Key to me helping Eroll was the delivery of a running prototype to help support my UK activities and a vote of confidence in ensuring a co-location between Tallinn and London. This prototype was promised in early 2018 and never delivered. Despite repeated requests it never came. There is no reason whatsoever that the team has three in Tallinn and zero in London.
I visited in Sep 2018 and spent a week going through all aspects of the future plans. We ended the week trying to get a shareholders agreement signed without success. Since then, for unknown reasons, I have had no contact with Ivo and Meelis and almost none with Juhan - despite spending multiple days in Tallinn to help the project!! The shareholders agreement was crucial as it outlines our formal commitment to one another, and allows effective corporate governance. We can see who does what and how they are accountable to each other and externally.
So at this stage we have a very serious situation Roman. The team has effectively told me a series of statements before I invested, withheld crucial information on their participation in Nobe and then did not fulfill those obligations and promises. They have not delivered any communications, updates and plans for getting Eroll into production. I had some limited contact with Juhan in 2019 but he claims to have had heart surgery. However, he did agree that an Eroll should be sent to London for the key mobility event on 18th Nov: Smart City Summit. This was effectively refused by Meelis again saying one isn't coming to London. Therefore, it is time to take action against both Atlas Partners, and Nobe, the latter due to Meelis involvement.
As an investor, Atlas Partners have shown me complete arrogance, complacency and disrespect. This is not at all acceptable and there are now huge consequences to bear from this. Whether it was me, or any other investor, we would agree that what happened here is wrong, and morally outrageous. You do not put a lot of money into something, only for entrepreneurs to abuse investors.
Without investors, there is no Eroll - or Nobe Cars. Sometimes customers can fund your R&D and go to market plans but very rarely and certainly not here where it's capital intensive at all stages, both for prototyping, tooling, certification, factory setup etc. If you do not think investors are important, you are not a true entrepreneur. You are just someone playing in a garage building a toy and that will not ensure long term success. Mess with your investors and it's the death of the dream!! Take the case of Uber and WeWork - both founders got kicked out by investor power.
I watched your crowdfunding campaign with interest for Nobe Cars where Meelis pronounces he is Founder of Nobe Cars. What do you think Nobe investors, both current and future, would think of the company should they hear of my story following my investment in Meelis, Ivo and Juhan of Atlas Partners? They simply would not invest and you get nowhere. This is the reality. If you mistreat investors, we will talk to one another and help protect our valuable capital. We have many choices where to put our funds - we certainly do not want to waste it on people who think it's funny or appropriate to play around with investors, tell them lies, not perform on a best efforts basis and treat us with value and respect. The entrepreneur who thinks they know it all will eventually get nowhere as they are not able to balance the opinions of those providing funds, all other stakeholders and their own misjudged egos!!
You asked how you can help - firstly wake Meelis, Ivo and Juhan up to the reality here that they may face prosecution for fraudulently misleading me here. Secondly, help me get one Eroll to London. I will make them accountable for their original promise to make the UK the HQ, and support me from Tallinn. There is a serious amount of competition in the EV scooter and moped market now and they have wasted so much time already.
At this stage, you and I have competing interests where the same person, Meelis Merilo. has so far been vital to both Eroll and Nobe being realised in a physical state beyond design drawings. Both brands are Estonian EV startups that represent Estonia in terms of design skills, engineering, IT and mapping into rapidly emerging trends of electric vehicles and renewable energy. In a startup, investors are not really putting their money into a company with a track record, they are investing in people, with ambitions, desire, determination, capabilities and passion. They have a limited window of opportunity to deliver a return on investment. Statistics show us 91% of startups sink and fail. That's 9/10 so picking the 1/10 is hard to do. Entrepreneurs need to do everything possible to repay the faith shown by investors. Customers of your product or service deserve nothing less either. Or else the startup dies.
Roman, you have a dream to see Nobe Cars become something. I can either help it, or help stop it. It is that simple in a sentence. It is not a threat. It is simply reality that Atlas Partners have abused me as an investor and there are consequences around this. Meelis has acted with incredible amounts of complacency and arrogance towards me so any investor thinking about putting in money to Nobe should not at all costs put money into Nobe. Without investors you get nowhere.
Ask what Meelis wants to happen the most - Eroll or Nobe? In other words, if he has to drop one project, which one is it? If he wants to continue both, it cannot continue as it stands. Things have to sort themselves out super fast. I still want an Eroll in London for Mon 18th Nov which is possible. I do not want this Eroll to go back to Tallinn for obvious reasons. This one in the UK is for marketing and display purposes whereas the ones in Tallinn are for testing, development etc. Atlas needs to meet its 2017 promises! You mentioned an Eroll would be brought to London - but by who? Juhan is sick with heart problems, and Ivo and Meelis have never visited the UK yet.
My sense is that if Eroll doesn't make it, Nobe also dies in the process. And everyone loses out, we all fail together. This includes Estonia as a nation.
The original intention was to have a great success story between Estonia and the UK where a European solution becomes an EV success story and gets onto streets around every major world market. I have several investors lined up on this but nobody will touch it until Atlas Partners is sorted out. This includes Meelis involvement with Nobe.
I am in contact with Enterprise Estonia and various Estonian agencies and government officials about this case. Additionally, I have a range of people watching your next steps on this to ensure you and Atlas Partners are fully accountable and responsible. Additionally, our own Member of Parliament is a senior UK statesman involved in UK trade. The British Embassy is also aware of this.
There is a chance that you, Meelis and Atlas see the sense here, do the right thing, act responsibly and everything turns out ok because this friction allowed us to reset the relationship, make new promises, triple our efforts and seize the opportunity here.
I await your comments.