Bingham Pitch Deck Teardown: A Legal Framework for Angel

Introduction: The Narrative Approach to Legal Education

The presentation titled "Understanding Angel and Venture Term Sheets: A Play in Three Acts" was delivered on April 17, 2014, by William Perkins and Siena Colegrave of the law firm Bingham. Unlike a standard pitch deck used to solicit capital, this is a professional services deck designed to educate founders and market the firm's venture capital practice. It uses a storytelling device—a fictional negotiation—to walk through the complex legalities of a startup investment.

Slide 1: Title Slide

The title slide establishes the theme: "A Play in Three Acts." This suggests a structured, chronological approach to the fundraising process. It identifies the presenters as a Partner and an Associate from Bingham, a firm that was later absorbed into Morgan Lewis. The date, April 17, 2014, places the content in a post-recession, high-growth era for venture capital.

Slide 2: Cast & Setting

This slide introduces the fictional case study. The Entrepreneur is Siena Colegrave (playing a character), an engineer who developed a product that speeds up electric car charging by 30%-50% . The company, SpeedyCharge , needs $500,000-$750,000 for a beta version. The Angel Investor is Will Perkins, a lawyer-turned-investor. The setting is a "local craft beer hall," which reflects the informal but high-stakes nature of early-stage angel negotiations. This slide is crucial because it sets the parameters of the deal: a seed-stage investment for a hardware/tech hybrid.

Slide 3: Act I - The Fundamentals

Act I covers the initial negotiation points. The "Key Terms" listed are the building blocks of any deal:

Entity Type: LLC vs. Corporation. · Valuation: Pre-money vs. Post-money. · Instrument: Convertible notes vs. Preferred stock (Priced round). · Cap Table: The ownership structure of the founders and early employees.

This slide serves as a checklist for the most basic economic terms of a deal. It emphasizes that before governance is discussed, the parties must agree on what is being bought and at what price.

Slide 4: Act II - Governance and Control

Once the valuation is settled, the negotiation moves to Act II. This section focuses on how the company will be run and how the investors will protect their interests. Key terms include:

Option Pool: The percentage of equity set aside for future hires (often a point of contention in valuation). · Vesting: Ensuring founders earn their shares over time. · Board Seat/Observer: Who gets a say in major company decisions. · Protective Provisions/Blocking Rights: Specific actions the company cannot take without investor approval.

This slide highlights the shift from "how much is it worth" to "who is in control."

Slide 5: Act III - Wrapping Up

Act III deals with the administrative and legal finality of the deal. It includes:

Information Rights: What financial data the investor is entitled to receive. · Timing and Drafting: Who writes the documents and how long it takes. · Counsel and Expenses: A critical point for founders, as they are typically expected to pay for the investor's legal fees out of the proceeds of the round.

This section is often overlooked by founders but can significantly impact the net capital available to the company after the round closes.

Slide 6: Act IV - What Didn't Come Up

This is perhaps the most valuable slide for an experienced founder. It lists terms that are often absent in friendly angel rounds but common in institutional VC rounds:

Anti-dilution: Weighted-average vs. Full ratchet (protecting investors if the company raises at a lower valuation later). · Participating Preferred: "Double dipping" where investors get their money back AND a share of the remaining proceeds. · ROFR and Co-sale: Rights regarding the sale of shares by other stockholders. · Drag-along: The ability to force all shareholders to agree to a sale of the company.

Slide 7: Other Resources

Bingham points founders toward industry standards: the NVCA (National Venture Capital Association) and SeriesSeed.com . This is a "best practice" for legal decks, as it shows the firm is not trying to reinvent the wheel but is working within established frameworks. It also includes a disclaimer that these models are no substitute for actual legal counsel.

Slides 8-10: Firm Capabilities and Geography

Slide 8 shows a global map of Bingham Offices , including hubs like Silicon Valley, London, Hong Kong, and Tokyo. Slide 9 and 10 provide the "Why Bingham" pitch, noting their National Tier 1 ranking and their ability to refer investment opportunities to clients. They emphasize a "reasonable, practical approach" and the absence of "bait and switch" tactics, which are common pain points for startups dealing with large law firms.

Slides 11-12: Representative Clients

These slides provide the social proof necessary to validate the firm's expertise. Slide 11 focuses on "Venture and Emerging Growth" clients, featuring recognizable names like Oculus VR, Wayfair, Intel Capital, and CloudBees . Slide 12 lists "Large Tech Clients" including Oracle, eBay, BlackBerry, and Raytheon . This demonstrates that the firm can support a company from its first $500k angel check all the way to becoming a global enterprise.

Slides 13-15: Team and Legal Disclosures

Slide 13 provides professional biographies for Will Perkins and Siena Colegrave , detailing their experience in M&A, venture financings, and corporate governance. Slide 14 is a call to action, and Slide 15 contains the mandatory Circular 230 Disclosure and attorney advertising notices required by legal ethics boards. These slides confirm the deck's function as a marketing tool for the firm's services.

What Works in This Deck

The Narrative Structure: By framing the legal process as a "Play in Three Acts," the presenters make a dry, technical subject engaging. It allows the audience to follow a logical progression from the first meeting at a beer hall to the final signing of documents.

The Key Terms Checklists: Each "Act" slide functions as a high-level checklist. For a founder, this is an excellent way to organize their thoughts before entering a negotiation. It separates the "must-haves" (valuation) from the "nice-to-haves" (information rights).

The Distinction Between Angel and VC Terms: Slide 6 (Act IV) is a brilliant addition. It prepares founders for the reality that as they grow, the terms will become more complex and potentially more restrictive. It manages expectations effectively.

What Is Missing

Specific Examples of "Market" Terms: While the deck lists the terms, it does not provide 2014-era "market" data (e.g., "Standard vesting is 4 years with a 1-year cliff"). While legal ethics might prevent giving specific advice in a general deck, providing ranges would have added more value.

The Impact of Terms on the Cap Table: The deck mentions the cap table but doesn't show a visual representation of how a $500k investment at a $2M pre-money valuation actually changes the ownership percentages. A visual "before and after" would have been a powerful educational tool.

Convertible Note Mechanics: Given that the fictional company is raising $500k-$750k, a convertible note is a very likely instrument. The deck mentions "Conversion cap" on Slide 3 but doesn't explain how a cap and a discount interact, which is one of the most confusing areas for new founders.

What a Founder Should Copy

The Checklist Approach: When preparing for a board meeting or a negotiation, founders should use the Act I, II, and III structure to ensure they haven't missed any critical components of the deal. It ensures that the conversation doesn't get stuck on valuation while ignoring governance.

The Use of Personas: If a founder is pitching a complex technical product, using a "Cast & Setting" slide to explain the user journey or the market problem can be much more effective than a wall of text. It humanizes the data.

Referencing Industry Standards: Just as Bingham references the NVCA, founders should reference industry benchmarks for their metrics (CAC, LTV, Churn). It shows that you are not operating in a vacuum and that you understand the "rules of the game" in your specific sector.