Is SpeedyCharge a real company?

No, SpeedyCharge is a fictional entity used as a case study within this presentation. The deck describes it as a tech start-up focused on electric vehicle charging times, created by founders Dinesh Melwani and Stef Lefebvre. The metrics provided, such as the $750,000 to $1,000,000 funding requirement, are illustrative figures meant to facilitate a discussion on seed financing mechanics rather than represent a real business's performance.

What is the primary purpose of the Cap Table slides?

The Cap Table slides (5 through 9) are designed to show the mathematical reality of dilution. They walk the viewer through three stages: the initial founder-only stage, the creation of a 10% equity incentive plan (option pool), and the final post-money state after a seed investor takes a preferred stock position. This helps founders visualize how their 100% ownership stake quickly moves toward 50% after a single round.

What legal terms does the deck suggest founders should prepare for?

The deck categorizes terms into three 'Acts.' Act II focuses on the structure of the round (convertible notes vs. preferred stock) and rights like vesting and pre-emptive rights. Act III covers governance, such as board seats and information rights. Act IV lists more aggressive or complex terms like participating preferred stock, full ratchet anti-dilution, and drag-along rights, which may not always appear in a standard seed round but are critical to understand.

How does the deck handle the 'Option Pool' calculation?

The deck explicitly shows the 'Available for Grant' line item within the Cap Table. On Slide 6, it highlights a 10% carve-out for the Equity Incentive Plan. By Slide 9, it shows how the plan increase and the series seed preferred stock work together to dilute the founders. This is a crucial lesson for founders who often forget that the option pool is usually created out of the pre-money valuation, effectively diluting the founders further before the investor's cash arrives.

Morgan Lewis Pitch Deck Teardown: A Legal Simulation

The 'Seed (and Venture) Financing: A Play in Three Acts' deck, dated March 7, 2017, is a pedagogical tool created by Morgan Lewis partners Will Perkins and Dinesh Melwani. Rather than pitching a real business, the 17-slide presentation uses a fictional electric vehicle charging startup called 'SpeedyCharge' to illustrate the complexities of seed-stage financing. The deck is structured as a narrative, following two founders from their initial concept to a negotiated seed round. It provides a rare, granular look at capitalization table evolution, showing how founder equity is diluted by option…

Key takeaways

The deck is a legal simulation created by Morgan Lewis partners to educate founders on venture financing (Slide 1).
It introduces a fictional startup, SpeedyCharge, which requires $750,000 to $1,000,000 to develop a beta version (Slide 2).
The presentation tracks the evolution of a Cap Table from 100% founder ownership to post-seed dilution (Slides 5-9).
It highlights the specific impact of an Equity Incentive Plan, showing a 10% option pool carve-out (Slide 6).
The simulation demonstrates how a 33.3% post-money stake for investors affects founder equity, reducing it to 51.7% in one scenario (Slide 9).
Act II and III serve as checklists for core legal terms including conversion caps, vesting, and board seats (Slides 12, 14).
Act IV lists 'what didn't come up,' covering advanced topics like full ratchet anti-dilution and drag-along rights (Slide 15).
The deck concludes with a profile of Morgan Lewis, noting they serve more than half of the Global 25 (Slide 17).

Introduction: A Legal Masterclass in Startup Financing

The document titled 'Seed (and Venture) Financing: A Play in Three Acts' is not a pitch deck in the traditional sense. It was not designed to raise capital for a business. Instead, it is a 17-slide educational presentation delivered on March 7, 2017, by partners at the law firm Morgan Lewis. The deck uses a narrative framework to guide founders through the legal and financial hurdles of a seed round. The 'company' featured, SpeedyCharge, is a fictional construct used to ground abstract legal concepts in a relatable scenario.

Slide 1: Title and Presenters

The cover slide establishes the theme: 'A Play in Three Acts.' It lists Will Perkins and Dinesh Melwani, both Partners at Morgan Lewis, as the presenters. The imagery features a skyline of global landmarks, signaling the firm's international reach, which is later confirmed in the closing slides. The date, March 7, 2017, places this presentation in a period of significant growth for the electric vehicle (EV) sector, which informs the fictional startup's industry.

Slide 2: The Cast of Characters

This slide introduces the fictional founders and the investor. Dinesh Melwani is described as a business development professional from 'TechCo' who estimates a funding need of $750,000 to $1,000,000 . Stef Lefebvre is the engineering lead, also from TechCo, who has developed a prototype that reportedly speeds up EV charging times by 30%-50% in early lab tests. The investor, Will Perkins , is portrayed as a lawyer-turned-angel investor. This setup allows the presenters to role-play a negotiation.

Slide 3: The Setting

The narrative 'Setting' explains that the founders and investor have already had a teleconference and are now meeting at a 'local craft beer pub' to negotiate terms. This slide serves to humanize the venture process, suggesting that while the terms are formal, the initial agreements often happen in informal settings.

Slide 4: The SpeedyCharge Brand

A simple logo slide for 'SpeedyCharge' is included. It serves no functional purpose other than to maintain the immersion of the fictional case study.

Slide 5: Pre-Money Cap Table (Founders Only)

This is the first of several technical slides. It shows the 'Model of Capitalization Table' as of February 29, 2016. At this stage, the founders hold 900,000 shares , representing 100.0% of the company. This is the baseline from which all subsequent dilution is measured.

Slide 6: The Equity Incentive Plan

The deck introduces the first layer of dilution: the Option Pool. The slide shows an 'Equity Incentive Plan' with 100,000 shares available for grant. This represents 10.0% of the total 1,000,000 shares. Consequently, the founders' ownership drops from 100% to 90.0% , even before any outside investment has been finalized. This is a critical lesson for founders regarding 'pre-money' option pool requirements.

Slide 7: Post-Money Series Seed (Scenario A)

This slide illustrates a post-money scenario where a Series Seed Preferred Stock investor takes 500,000 shares . In this model, the total share count rises to 1,500,000. The investor now owns 33.3% of the company, and the founders' stake is diluted to 60.0% . The 'Available for Grant' pool is now 6.7% of the post-money total.

Slide 8: Post-Money Series Seed (Scenario B)

This slide shows a variation where the 'Plan Increase' is factored in at the time of the seed round. The total shares reach 1,647,059. The investor still holds 500,000 shares , but because of the increased option pool (now 247,059 total options), the investor's percentage is 30.4% and the founders' stake is 54.6% . A red circle highlights the 6.1% and 8.9% figures for the option pool components.

Slide 9: Post-Money Series Seed (Scenario C)

The final Cap Table model shows the most aggressive dilution. The Series Seed Preferred Stock is 580,645 shares , representing 33.3% of the company. The founders are left with 51.7% . This slide emphasizes how different methods of calculating the option pool and the investor's target percentage can significantly impact the founders' remaining equity.

Slide 10: Act I Checklist

Act I summarizes the basic concepts covered: Angel/seed/VC distinctions, Valuation, Cap table mechanics, Pre-money vs. Post-money, and the Option plan. It uses a checklist format to ensure the audience understands these foundational elements before moving to legal rights.

Slide 11 & 12: Act II - Structural Terms

Act II moves into the 'meat' of the legal agreement. Slide 12 lists terms that define the investment vehicle: Convertible notes , Preferred stock , Priced rounds , Conversion caps , Vesting , Pre-emptive rights , Blocking rights , and Protective provisions . These are the levers that control how much power an investor has over company decisions and future rounds.

Slide 13 & 14: Act III - Governance and Logistics

Act III focuses on the ongoing relationship between the founder and the investor. The checklist includes Board seats , Observers , Information rights , Timing , Drafting , Counsel , and Expenses . This section highlights that a seed round is not just a transaction but the start of a governed partnership.

Slide 15: Act IV - Advanced Legal Terms

Act IV, titled 'What didn't come up...', is a list of more complex or 'investor-friendly' terms that founders might encounter. These include Dividends , Participating preferred , Anti-dilution (specifically Weighted-average and Full ratchet ), Registration rights , ROFR (Right of First Refusal), Co-sale , and Drag (Drag-along rights). By separating these, the presenters suggest these are often secondary negotiations or terms found in later-stage venture rounds.

Slide 16 & 17: Conclusion and Firm Profile

The deck concludes with a 'Thank You' slide providing contact information for Perkins and Melwani. The final two slides are promotional for Morgan Lewis, noting their history (founded in 1873), their scale (over 2,000 lawyers), and their global reach (30 offices). They explicitly state they serve 'more than half of the Global 25' and '80 of the Fortune 100.'

What This Deck Does Well

Narrative Clarity: By using a fictional company (SpeedyCharge), the deck makes dry legal concepts like 'post-money dilution' tangible. Founders can see exactly how their 900,000 shares lose percentage value as new rows are added to the spreadsheet. · Granular Cap Table Evolution: The step-by-step progression from Slide 5 to Slide 9 is the most valuable part of the deck. It demystifies the 'math' of a seed round, which is often where founders feel most disadvantaged during negotiations. · Categorization of Terms: Grouping legal terms into 'Acts' helps founders prioritize what to focus on. Act II (Structure) and Act III (Governance) are the essentials, while Act IV (Advanced) represents the 'fine print' that can wait for deeper legal review.

What Is Missing

Real-World Benchmarks: Because the company is fictional, the deck lacks real-world context for what a 'good' valuation or 'standard' dilution looks like in the current market. It provides the mechanics but not the strategy. · Term Sheet Examples: While the deck lists terms like 'Protective Provisions,' it does not provide the actual language used in a term sheet. Founders would still need to see a sample document to understand how these terms are phrased. · Exit Scenarios: The deck focuses entirely on the 'entry' (the financing round). It does not show how these terms (like participating preferred or anti-dilution) affect the founders during an 'exit' (acquisition or IPO), which is when these legal clauses truly matter.

Founder Takeaways

For a founder, this deck is a roadmap for legal preparation. The most important takeaway is the Option Pool impact . Slides 6 and 9 clearly show that the option pool is a founder expense, not a shared one. If an investor asks for a 10% post-money option pool, that 10% comes directly out of the founders' pocket before the investor's money is counted. Founders should use the checklists in Acts II, III, and IV as a 'glossary of terms' to study before meeting with counsel. Understanding the difference between a 'Weighted-average' and a 'Full ratchet' anti-dilution clause (Slide 15) can be the difference between retaining control of a company and being wiped out in a down round.

Frequently asked questions

Is SpeedyCharge a real company?: No, SpeedyCharge is a fictional entity used as a case study within this presentation. The deck describes it as a tech start-up focused on electric vehicle charging times, created by founders Dinesh Melwani and Stef Lefebvre. The metrics provided, such as the $750,000 to $1,000,000 funding requirement, are illustrative figures meant to facilitate a discussion on seed financing mechanics rather than represent a real business's performance.
What is the primary purpose of the Cap Table slides?: The Cap Table slides (5 through 9) are designed to show the mathematical reality of dilution. They walk the viewer through three stages: the initial founder-only stage, the creation of a 10% equity incentive plan (option pool), and the final post-money state after a seed investor takes a preferred stock position. This helps founders visualize how their 100% ownership stake quickly moves toward 50% after a single round.
What legal terms does the deck suggest founders should prepare for?: The deck categorizes terms into three 'Acts.' Act II focuses on the structure of the round (convertible notes vs. preferred stock) and rights like vesting and pre-emptive rights. Act III covers governance, such as board seats and information rights. Act IV lists more aggressive or complex terms like participating preferred stock, full ratchet anti-dilution, and drag-along rights, which may not always appear in a standard seed round but are critical to understand.
How does the deck handle the 'Option Pool' calculation?: The deck explicitly shows the 'Available for Grant' line item within the Cap Table. On Slide 6, it highlights a 10% carve-out for the Equity Incentive Plan. By Slide 9, it shows how the plan increase and the series seed preferred stock work together to dilute the founders. This is a crucial lesson for founders who often forget that the option pool is usually created out of the pre-money valuation, effectively diluting the founders further before the investor's cash arrives.
Who is the intended audience for this presentation?: The intended audience is early-stage entrepreneurs and founders who are unfamiliar with the legal nuances of venture capital. By framing the presentation as a 'Play in Three Acts,' Morgan Lewis partners Will Perkins and Dinesh Melwani attempt to demystify the intimidating process of negotiating a term sheet and managing a capitalization table, while also positioning their firm as an expert guide in the space.