So... What Exactly Happened to ALTA Dirt Bikes? (Parts 1 and 2)

Yeah, if the claims in this video are true then Harley did not act in good faith and did kill Alta.

I'm a partner for a tech VC fund. This is a big chunk of what I do for a living - helping startups developing new technologies to partner with corporates to get to scale. So here's my thoughts in the info in this video.

Any partner has to be committed. There has to be strategic alignment. It's a courtship leading to a marriage. Many courtships fail but better to fail early than get married and realise you need a divorce. If your startup commits to one corporate before you've agreed the details of that relationship then you can get taken advantage of.

Businesses are driven by more than engineering. If your engineers and their engineers are getting on well, then that's only a small part of a successful relationship.

Don't ever let the corporate run the clock down, because your startup has a finite amount of money and therefore time. The corporate has more money and time than you. You will run out; they will not.

I think no-shop/exclusivity agreements are really unbalanced in favour of the corporate. They inevitably run the clock down. Our fund doesn't use them. In fact, when startups have come to us saying that we're the only investor that they are talking to, I'll tell them to go and talk to other funds, because you want several offers on the table.

A last-minute new term sheet is a dick move. Sure, they're not legally binding but still, what the fuck. That's not how I do business.

But fundamentally, I'm not sure what Harley was wanting to get out of this. If they wanted the tech, then they could have taken the good faith approach, done a fair deal, and bought for a few tens of millions. Instead, they tried to screw Alta to get the tech for just millions. That failed. Harley got no technology and earned a reputation for being untrustworthy partners.
 
happyinmotion said:
Yeah, if the claims in this video are true then Harley did not act in good faith and did kill Alta.

I'm a partner for a tech VC fund. This is a big chunk of what I do for a living - helping startups developing new technologies to partner with corporates to get to scale. So here's my thoughts in the info in this video.

Any partner has to be committed. There has to be strategic alignment. It's a courtship leading to a marriage. Many courtships fail but better to fail early then get married and realise you need a divorce. If your startup commits to one corporate before you've agreed the details of that relationship then you can get taken advantage of.

Businesses are driven by more than engineering. If your engineers and their engineers are getting on well, then that's only a small part of a successful relationship.

Don't ever let the corporate run the clock down, because your startup has a finite amount of money and therefore time. The corporate has more money and time than you. You will run out; they will not.

I think no-shop/exclusivity agreements are really unbalanced in favour of the corporate. They inevitably run the clock down. Our fund doesn't use them. In fact, when startups have come to us saying that we're the only investor that they are talking to, I'll tell them to go and talk to other funds, because you want several offers on the table.

A last-minute new term sheet is a dick move. Sure, they're not legally binding but still, what the fuck. That's not how I do business.

But fundamentally, I'm not sure what Harley was wanting to get out of this. If they wanted the tech, then they could have taken the good faith approach, done a fair deal, and bought for a few tens of millions. Instead, they tried to screw Alta to get the tech for just millions. That failed. Harley got no technology and earned a reputation for being untrustworthy partners.
Click to expand...
That's an interesting perspective, thanks for sharing it! I agree, the no shop agreement thing does sound a bit unbalanced, especially since startups do tend to have a limited runway. But that's just how things are a lot of times. Also, I completely agree that a last minute term sheet is a dick move. But, as long as it's legal, companies have and will use it.

Now, I will touch a bit on their motives in part 2, video dropping this Sunday. Long story short, in my opinion, I think they did go into it in genuinely interested in the tech. But then things changed as they saw other options. That's just my opinion.
 
Marc here. Haven’t been on this forum for the last 5 years or so, but happy to be back. Great work on this, @krankit and really nice to be back in touch with @Philip.

I’ll try to check in here to answer questions or offer clarification over the next week, especially after Part 2 drops. I really appreciated the support from Philip and this whole forum… it holds a special place in my heart, for sure.
 
Pretty sad story.
Altas look so cool to me and they apparently are pretty reliable, too. Years ago I started to have a strong interest when I watched a video in which AJ Catanzaro tested one and when I found out that they also needed little maintenance I immediately wanted one, but then I found out that there were few of them and even less in Europe and that Alta didn't exist anymore.
I would probably have one otherwise.

happyinmotion said:
Businesses are driven by more than engineering. If your engineers and their engineers are getting on well, then that's only a small part of a successful relationship.
Click to expand...
I absolutely agree.

happyinmotion said:
But fundamentally, I'm not sure what Harley was wanting to get out of this. If they wanted the tech, then they could have taken the good faith approach, done a fair deal, and bought for a few tens of millions. Instead, they tried to screw Alta to get the tech for just millions. That failed. Harley got no technology and earned a reputation for being untrustworthy partners.
Click to expand...
I am not an expert but I think that this is a real life example of why the concept of the Invisible Hand by A. Smith is not always true. He used to say that in a free market in which people only pursue their interests, the market will heal itself because the actions generated by selfishness will bring the group to the best overall common condition. Instead, it has been shown that the overall best condition among competitors is generally achieved when everyone cares about its own benefit and the group's benefit. Remember the scene about the blonde at the bar in A Beautiful Mind where they all wanted the blonde and Nash told them that they would have just hindered each other?
Appartently HD got nothing, their reputation worsened, Alta went out of business and a lot of us had to wait years for the Stark Varg.

Honcho said:
Marc here. Haven’t been on this forum for the last 5 years or so, but happy to be back. Great work on this, @krankit and really nice to be back in touch with @Philip.

I’ll try to check in here to answer questions or offer clarification over the next week, especially after Part 2 drops. I really appreciated the support from Philip and this whole forum… it holds a special place in my heart, for sure.
Click to expand...
So, are you the Marc Fenigstein in Krankit's video, the person who now works at Flux?
 
Watching this brings back a lot memories of how bad it felt the day the Thank You post was put up. The team at Alta was so great, and always helpful when it was needed. Its a time in my life I will always look back on fondly, just being a small part of something I thought was going to be great. Showing up at the track with an Alta made me feel like a rockstar!
 
@happyinmotion and @Theo neither of you are wrong, but we didn't have much optionality at the time. Of course we wanted to be a stronger position, but prior to the SPAC bubble, it was nearly impossible for Alta to raise money - we put the Redshift into initial production on $25m total into the company including pioneering our new battery architecture - now industry standard. Rarely were able to operate with more than 6 months of runway (over a 9 year period!). So when H-D approached us with the first part of the deal, non-dilutive capital that we convinced them to put towards plans we already had, no responsible executive team or board would have turned that down. And I have every reason to believe it was a good faith deal.

As for the acquisition offer, yes, there is good reason to believe it was in bad faith from the start - you'd have to ask H-D employees, but there are a number that are no longer there that likely know the truth. I would have preferred we turn it down and raise the Series C, but I was/am a pathological optimist 😉 and given our context of perpetual underfunding and the threat of H-D pulling the partnership with the remaining almost $20m in non-dilutive funding if we did so, it was a very reasonable board decision to take the deal. And while it is somewhat common for an equity financing round to skip a no-shop, I have rarely seen an acquisition that did so outside of *highly* competitive sectors (which we were not). No one wants their offer used to go squeeze more money and the final deal out of a competitor. Famously, this is how Ferrari screwed Ford - lawyers have learned some lessons since the 60s.

Hindsight is 20/20. We now know if we had hung on for maybe 12 (certainly 18) months, we would have hit the SPAC bubble and could have raised $100Ms easily given our position and sales (by 2020 we expected over 10k unit sales per year, >$100M in revenues at positive margin). We now know how little H-D valued our brand and product line - we now know thanks to Stark how wrong they were to do so. But at the time, to deny our long-time tapped-out investors an exit, take a $20M hit, in order to roll the dice on another uncertain funding round, rather than take a solid deal from a company we knew needed us and had demonstrated a major commitment to electric (and was cornered by their own promises to the public markets)... I can't think of many boards that would have done differently than we did.
 
Well, I've just watched part 2.

:D

Up to like 30 minutes ago I used to believe that the people in this forum were just EV bikes enthusiasts who supported each other with technical problems and chatted about news in that field. I've found out that your involvement in Alta is way more than I expected! Kudos to you!
 
Theo said:
Well, I've just watched part 2.

:D

Up to like 30 minutes ago I used to believe that the people in this forum were just EV bikes enthusiasts who supported each other with technical problems and chatted about news in that field. I've found out that your involvement in Alta is way more than I expected! Kudos to you!
Click to expand...
Yep. For those who are new, this forum started as AltaOwnersForum.com.

I am going to move Part 2 up in the thread to make it more visible.
 
I can share the outside perspective, through the eyes of Alta owners.

When the news about the partnership with Harley-Davidsong came out, there was almost no discussion about it. It was all business as usual.

About five months later, one potential Alta buyer expressed fear. Then three of us expressed a mix of optimism, caution, and pessimism. At no time did anyone think any acquisition was being considered. We love dirt bikes, and Harley hates dirt bikes, everyone knew that.

Questions from a potential owner

I'm thinking of buying an Alta Redshift MXR, but have some questions. First, a bit on my background... I'm 46 years old, and have been riding since I was 6. I'd consider myself a pretty good off-road rider, but haven't done much racing. I've done an occasional motocross race over the years...
electricdirtriders.com electricdirtriders.com

There was long radio silence. No news or discussions from 3/1/2018 until 8/29/2018, when the rumor was leaked by Asphalt & Rubber that the two companies were parting ways.

Rumor: Harley-Davidson and Alta Motors Are Parting Ways

This is just in: "Our sources tell us that Harley-Davidson has all but removed itself from its joint motorcycle project with Alta, and backed out of its involvement in the San Francisco startup." Harley-Davidson and Alta Motors Are Parting Ways Interesting. I hope Alta is not cash strapped...
electricdirtriders.com electricdirtriders.com

By then, it was too late to keep operating Alta as-is. It had to be sold. Unfortunately, BRP was the only company in the know and was somewhat interested in buying. Harley sniffed that out and scared BRP away with potential lawsuits. And that was the end of Alta as we knew it.
 
Little did we know that the management and the investors were baited with a lucrative (but legally nonbinding) term sheet. The perspective to get rich quick must have looked extremely appealing. Nobody saw the red flags. Even though the marriage appeared forced, they decided to take the money and accept a marriage proposal from a known bully and a felon -- H-D. That was their biggest mistake. The one that cost them their company and entire investments.
 
First up, this is great investigative journalism. Thanks @krankit. And thanks to @Philip for the years of work supporting the community.

Alta only sold 800 bikes? At a loss? Oof. That's a difficult negotiating position.

I'd like to say Alta was fundamentally too early, the tech not ready yet, the market not ready yet, but...

I'm in NZ and we've just had UBCO enter receivership. They had a very clear niche and a strong brand - rugged and utilitarian bikes for farmers, hunters, and fleets. They still failed. There may be a story to be told there. There's plenty about the failure that I don't understand. And they certainly burnt lots of VC money, about US$40m. So it's not just about the tech and the market, but also the business strategy - specifically managing the need for new investment that grows faster than revenue grows. That's the hardest challenge for any start-up.

At the end of the day, Harley broke Alta, got nothing, and still haven't made a viable business from electric bikes. But other companies are taking electric bikes forward and making this technology a success.

I'm glad Stark is in a much stronger position with very different sales, margin, capital structure, and no dependence upon the incumbents. I'm waiting to see who else steps forward.
 
Philip said:
Little did we know that the management and the investors were baited with a lucrative (but legally nonbinding) term sheet. The perspective to get rich quick must have looked extremely appealing. Nobody saw the red flags. Even though the marriage appeared forced, they decided to take the money and accept a marriage proposal from a known bully and a felon -- H-D. That was their biggest mistake. The one that cost them their company and entire investments.
Click to expand...
I’ll clarify that the offer was not that lucrative - no one was going to get rich quick. Our last investors would make a relatively small amount, our early investors would get some of their money back, and the founders would have become salaried employees at HDMC.

I wouldn’t call it “extremely appealing.” I would call it “fiscally irresponsible to turn down,” which is unfortunately the legal exposure that board members are often most concerned with.
 
ELECTRIFYING NEWS FROM STARK

At a time when LiveWire’s consolidated net loss was $19.3 million for the first quarter 2025 in order to sell 33 units globally, Stark Future recorded its highest-ever monthly revenue of €18.3 million while delivering a positive EBITDA of €2.8 million. Positive cash flow from an eMoto company? Stark believes this signifies an even greater moment for the viability and sustainability of the EV market.

https://dealernews.com/.../electrifying-news-from-stark/

It feels like Harley is getting what they deserved.
 
I remember Marc was a regular at VitalMX, and even did a call in show IIRC? The amount of idiotic hate that e-moto has received since the beginning was unreal, almost everyone was against a quiet bike. Until they rode one. Larry Hughes, who worked for Alta as a dealer rep, was also a regular source, and Larry moved over to Stark also, but was too soon again. It took a while, but the noise against them has largely died down and they are fitting in as "normal" dirt bikes.
The range issue has been WAY overplayed, for a dirt bike the range exceeds the human endurance for the vast majority of weekend warriors, and that is where the market is. While better batteries, quick swap and charging are all great, I have yet to need to charge at the track doing my normal thing, and have found that the rideability has greatly increased my ability to put in seat time, and that's what matters most to this 67 yr old.
 
For supermoto not being able to swap the battery is very annoying. The only thing that overheats on the bike is the battery so between races I need to make sure I have the cooling fans on the battery. Where my Sur Ron Light Bee I can swap a fresh battery in. It takes FOREVER to charge the Redshift also. The battery tech isn't there yet. Needs to be lighter and more energy.

Longer races like a grand prix I would think the Redshift will die before the race ends and you't can just sit in the pits and charge the bike during the race.

So the electric dirt bike and supermoto still have a ways to go. From what I hear even the Varg's battery will overheat when ran at 80HP in race conditions and from what I heard in the beginning was the Varg cannot overheat it's battery...
 
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