Morgan Lewis Angel Financing Pitch Deck Teardown

Introduction: The Fundraising Simulation

The presentation titled "Angel Financing: A Play in Three Acts" is a collaborative effort between the global law firm Morgan Lewis and The Capital Network (TCN) . Unlike a standard startup pitch deck designed to solicit capital, this deck is an educational tool. It uses a narrative structure to walk founders through the legal and financial mechanics of a seed-stage investment. The deck is dated July 26, 2018, and serves as a comprehensive guide to term sheet negotiations.

Slide 1-3: The Narrative Setup

The deck opens with a theatrical theme, using a red curtain backdrop and the title "A Play in Three Acts." Slide 2 introduces The Capital Network , a non-profit organization that provides workshops and mentorship for entrepreneurs. Slide 3 introduces the fictional company at the heart of the simulation: Speedy Charge . This branding is used throughout the deck to make the abstract legal concepts feel like a real business case.

Slide 4-6: The Cast and Setting

Slide 4 introduces the fictional founders, Mike Conza and Gitte Blanchet . In reality, these are the names of Morgan Lewis partners. The slide provides a detailed backstory: both founders worked at "TechCo," and Gitte developed a prototype for an electric car charging device that improves speeds by 30%-50% . The funding requirement is clearly stated as $750,000 to $1,000,000 to develop a beta version and run a pilot with a local electric car club. Slide 5 introduces the investor, Julio Vega (also a Morgan Lewis partner), described as a lawyer-turned-angel investor. Slide 6 sets the scene: the founders have already shared their deck via email and are now attending their first in-person meeting to negotiate terms.

Slide 7-8: Act I - The Vision

Slide 8 uses a simple visual metaphor to show the transition from a "crude prototype" (a messy pile of wires) to a sleek, wall-mounted consumer product. This represents the milestone the seed funding is intended to achieve. This slide mimics the "Product" slide in a real pitch deck, emphasizing the leap from R&D to a marketable asset.

Slide 9-11: The Founder's Draft Cap Table

These slides are the technical core of the presentation. Slide 9 shows the starting point: Founders own 900,000 shares (100%) . Slide 10 introduces the Equity Incentive Plan , setting aside 100,000 shares (10%) for future employees, which reduces founder ownership to 90%. Slide 11 shows the "Founder Draft" of a post-money cap table. In this scenario, the investor buys 500,000 shares of Series Seed Preferred Stock . The total share count rises to 1,500,000. In this version, the founders retain 60% , the investors hold 33.3% , and the option pool is diluted to 6.7%.

Slide 12-13: The Investor's Counter-Offer

Slide 12 introduces the "Investor Draft," a common point of friction in real negotiations. The investor demands that the option pool be 15% of the post-money valuation. To achieve this, the founders must increase the pool before the investment. Slide 13 shows the result: the founders' ownership drops from 60% in the previous slide to 51.7% . The investor still gets their 33.3%, but the founders have absorbed all the dilution required to create a larger option pool for future hires. This is a crucial lesson for founders on the difference between pre-money and post-money option pool math.

Slide 14-15: Act I Summary and Transition

Slide 14 lists the key terms covered in the first act: Valuation, Cap Table, Pre-money vs. Post-money, Option Plans, and Vesting . These are the "economic" terms of a deal—the factors that determine who owns what and how much it is worth.

Slide 16-17: Act II - The Instruments

Act II moves into the specific legal structures used to move money. Slide 16 lists Convertible Notes, Preferred Stock, Priced Rounds, and Conversion Caps . It also introduces Pre-emptive rights (the right to maintain ownership in future rounds) and Protective provisions (veto rights over certain company actions). This section explains the "how" of the investment rather than just the "how much."

Slide 18-19: Act III - Control and Governance

Act III focuses on the relationship between the founder and the investor after the check is signed. Slide 18 lists Board seats, Information rights, and Expenses . This act highlights that fundraising is not just about cash; it is about who has a seat at the table and who pays for the legal fees associated with the closing (usually the company).

Slide 20: Act IV - Advanced Investor Protections

Slide 20, titled "If there was an Act IV," lists more aggressive terms that might appear in a "down market" or a highly investor-favorable deal. These include Participating Preferred (where investors get their money back AND their percentage of the remaining proceeds), Full Ratchet Anti-dilution , and Drag-along rights . By separating these into a hypothetical fourth act, the deck implies these are less standard or more onerous than the terms in Acts I-III.

Slide 21: Conclusion and Contact

The final slide provides the real identities and contact information for the "cast." It serves as a call to action for founders to seek professional legal counsel, reinforcing that the presentation is attorney advertising and not formal legal advice.

What Makes This Deck Effective?

The primary strength of this deck is its educational transparency . By walking through the cap table step-by-step (Slides 9-13), it demystifies one of the most confusing aspects of fundraising: how a 33% investment can result in a founder losing much more than 33% of their equity due to option pool shuffling. The use of a fictional company, Speedy Charge , allows the presenters to speak candidly about "investor demands" without disparaging a real client or deal.

Furthermore, the categorization of terms into Acts is a brilliant pedagogical move. It helps founders prioritize their focus: first on the economics (Act I), then on the legal instrument (Act II), and finally on the long-term governance (Act III). This prevents founders from getting bogged down in board seat discussions before they have even agreed on a valuation.

What is Missing from the Deck?

As a legal simulation, the deck intentionally omits several elements found in a standard pitch deck:

Market Analysis: There is no data on the size of the EV charging market or the competitive landscape. · Unit Economics: While Slide 4 mentions a 30%-50% speed increase, there is no mention of the cost to manufacture the device or the projected retail price. · Go-to-Market Strategy: Beyond a single beta test with a car club, the deck does not explain how Speedy Charge will scale. · Financial Projections: There are no P&L statements or burn rate calculations, only cap table mechanics.

These omissions are not flaws in this specific context, as the deck's goal is to teach term sheet mechanics , not to sell a business. However, a founder using this as a template for a real pitch would need to add these missing sections.

What Founders Should Copy

Founders can learn a great deal from the clarity of the cap table slides . When presenting to potential lead investors, having a clear understanding of your current cap table and the impact of a new option pool is vital. Founders should replicate the "Pre-Money" vs. "Post-Money" comparison shown in Slides 11 and 13 to ensure they are not surprised by dilution at the closing table.

Additionally, the milestone-based ask on Slide 4 is a best practice. Instead of just asking for $1 million, the fictional founders explain exactly what that money buys: a beta version and a specific pilot program. This gives investors a clear metric for success. Finally, the logical grouping of legal terms is a useful framework for any founder preparing for due diligence; it allows them to organize their thoughts and legal questions into manageable categories.

Final Analysis

The Morgan Lewis "Angel Financing" deck is a masterclass in founder education. It successfully bridges the gap between high-level business goals and the granular legal reality of a term sheet. By using a narrative "play" format, it makes dry topics like "weighted-average anti-dilution" and "pre-emptive rights" accessible. For any founder entering their first seed round, the cap table progression in this deck is an essential study in how equity is actually distributed in the real world.