Speedy Charge Pitch Deck Teardown: A Legal Simulation

Introduction: The Theatrical Approach to Term Sheets

The document titled "Angel Financing (3 act play) 8.15.17" is a unique artifact in the world of startup fundraising. Rather than being a pitch for capital, it is a pedagogical tool designed by the law firm Morgan Lewis and The Capital Network. It uses a fictional company, Speedy Charge , to walk founders through the often-opaque process of seed-stage negotiations. The deck is structured as a play, moving from the initial 'Cast' and 'Setting' to the mechanical 'Acts' of a deal.

The Setup: Slides 1 to 4

Slide 1 introduces the collaborators: Morgan Lewis and The Capital Network. The title, "Angel Financing: A Play in Three Acts," sets the tone for a narrative-driven educational session. Slide 2 introduces the fictional brand, Speedy Charge , with a logo that suggests energy and speed.

Slide 3 provides the 'Cast.' We meet the founders, Dinesh Melwani and JiWon Park. The slide notes they are former employees of a large technology company called "TechCo." This is a classic founder trope: the experienced corporate professional spinning out to solve a specific problem. The problem identified is EV charging time, with a claimed 30%-50% improvement in "crude prototype" tests. The ask is clearly defined here: $750,000 to $1,000,000 to develop a beta version and place it with a local electric car club.

Slide 4 establishes the 'Setting.' It describes a transition from an initial email introduction and teleconference to the "first in-person meeting to discuss and negotiate terms." This is a critical distinction in the fundraising process, moving from the 'pitch' to the 'deal.'

Act I: The Math of the Cap Table (Slides 5 to 12)

Act I is the most technical and arguably the most valuable portion of the deck. Slide 6 uses a simple visual metaphor—a messy pile of wires transforming into a sleek wall-mounted charger—to represent the transition from a raw idea to a professional product. However, the real work begins on Slide 7.

Slide 7: The Founder Draft. This shows the starting point. The founders own 100% of the company, represented by 900,000 shares of common stock. There are no options and no investors. This is the 'clean' state every founder starts with.

Slide 8: The Option Pool. The deck introduces a 100,000-share "Equity Incentive Plan" (10% of the total). Crucially, the red circle highlights that 0.0% has been granted, but the 10% is "Available for Grant." This slide teaches founders that investors expect an option pool to be created before the investment, which dilutes the founders' 100% down to 90% before a single dollar is raised.

Slide 9: The Post-Money Reality. Here, the deck shows the issuance of 500,000 shares of Series Seed Preferred Stock. The total share count rises to 1,500,000. The founders' ownership drops to 60%, the investors take 33.3%, and the option pool sits at 6.7%. This is a standard visualization of a seed round, but the deck goes further.

Slides 10 and 11: The Investor Draft. These slides show a negotiation where the investor demands a larger option pool (increasing from 10% to 15% post-money). Slide 11 shows the final result: to satisfy the investor's requirement for a 15% pool after the investment, the founders are diluted further, ending up with 51.7% of the company. This is a masterclass in how 'standard' terms like option pool shuffling can significantly impact founder equity.

Slide 12 summarizes the vocabulary of Act I: Angel/seed/VC, Valuation, Cap table, Pre-money, Post-money, Option plan, and Vesting.

Act II: The Instruments of Investment (Slides 13 to 14)

Act II shifts from the math to the legal structures. Slide 14 lists the primary instruments and terms:

Convertible notes: Debt that converts into equity. · Preferred stock: The standard for priced rounds. · Conversion cap: A ceiling on the valuation at which a note converts. · Pre-emptive rights: The right of investors to maintain their percentage in future rounds. · Blocking rights / Protective provisions: Veto powers over major company decisions.

Act III: Governance and Logistics (Slides 15 to 16)

Act III covers the 'living together' phase of the investor-founder relationship. Slide 16 highlights:

Board seat / Observation rights: Who gets to be in the room for major decisions. · Information rights: The requirement to provide financial statements to investors. · Timing, Drafting, and Counsel: The logistical reality of closing a deal. · Expenses: A reminder that founders often pay the legal fees for both sides out of the investment proceeds.

Act IV: The Advanced Terms (Slides 17 to 18)

The deck concludes with a hypothetical 'Act IV,' listing terms that are generally less favorable to founders or reserved for later stages. Slide 18 includes Participating Preferred (where investors get their money back plus their pro-rata share of the remainder), Full Ratchet Anti-dilution (the most aggressive protection against down-rounds), and Registration Rights . By separating these into an 'Act IV,' the authors suggest these are points of friction that founders should be wary of in a standard angel round.

What Works in This Deck

Clarity of Dilution: The step-by-step progression of the cap table (Slides 7-11) is the best feature of this deck. It removes the abstraction of percentages and shows the actual share counts, making the impact of an option pool increase undeniable.

Educational Structure: By framing the financing as a play, the deck makes a dry, legalistic process feel like a narrative. This helps founders understand that fundraising is a series of interactions and negotiations, not just a transaction.

Honesty About Costs: Including "Expenses" on Slide 16 is a rare and helpful inclusion. Many founders are surprised to find that the $1M they raised is immediately reduced by $30k-$50k in legal fees for both their own counsel and the lead investor's counsel.

What is Missing

Market and Business Data: Because this is a legal simulation, there is no market sizing (TAM/SAM/SOM), no competitive analysis, and no financial projections. A founder using this as a template for a real pitch would need to add approximately 8-10 slides of business substance.

Traction: The deck mentions a "local electric car club" beta test on Slide 3, but provides no data on user engagement, unit economics, or manufacturing costs. In a real pitch, the 'crude prototype' results would need to be backed by technical white papers or data logs.

The 'Why Now': There is no slide addressing the macro trends in the EV market or the regulatory environment that makes Speedy Charge a timely investment.

What a Founder Should Copy

The Cap Table Visualization: Founders should use the format of Slides 9 and 11 to model their own rounds. Being able to show an investor that you understand exactly how their requested option pool affects your 'post-money' ownership demonstrates a high level of financial literacy.

The 'Cast' Slide: Slide 3 is a strong example of how to present founder bios. It focuses on relevant experience (Business Development and Engineering at a tech company) and the origin story of the product (working on it at night and on weekends). It establishes credibility and commitment simultaneously.

The Clear Ask: The specific range of $750,000 to $1,000,000 and the clear milestone (beta version + car club placement) on Slide 3 is exactly how an 'Ask' should be phrased. It tells the investor exactly what their money will buy.

Conclusion

The Speedy Charge deck is an excellent primer on the mechanics of a deal. While it lacks the 'sizzle' of a modern venture pitch, its 'steak'—the legal and mathematical reality of equity—is something every founder must master before stepping into the room for the 'Act I' meeting described on Slide 4.