Mike Conza and Gitte Blanchet are founders of SpeedyCharge, a startup developing a device to speed up electric vehicle charging times. They need $750,000-$1,000,000 to develop a beta version. Julio Vega is a seed investor interested in their pitch. At their first in-person meeting, Mike presents SpeedyCharge's capitalization table showing the founders owning 90% of shares pre-money. The investor proposes alternative tables with the investor owning 15% or 33% of shares post-money through a Series Seed preferred stock investment. The document outlines key terms that may be negotiated in the investment, including convertible notes, preferred stock, option plans, and rights.

1. © 2018 Morgan, Lewis & Bockius LLP
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3. 3
SPEEDYhCHARGE

4. CAST
Founders: Mike Conza and Gitte Blanchet
Mike has spent many years in business development at TechCo, a large technology
company. He and Gitte recently launched a new tech start-up, Speedy Charge. Mike
estimates that SpeedyCharge needs between $750,000 to $1,000,000 to develop a beta
version of the product and place it with a local electric car club that has signed on to
beta test the prototype.
Gitte has also spent many years at TechCo, in engineering. She and Mike met about six
months ago and discovered a mutual interest in electric cars. Gitte was working on an
idea at night and on weekends that addressed charging times for electric cars. Having
spotted the growing interest in electric cars, the two started further work to develop a
device that sits between the power source and the car charging port that speeds
charge times by 30%-50% (in early lab tests of a crude prototype).
4

5. CAST
Seed Investor: Julio Vega
Julio, a lawyer by training, now spends his time investing in early-stage growth
companies, and together with his group of old friends, coordinates their angel/seed
investments.
5

6. SETTING
Previously...
Originally introduced by email through a mutual connection, Mike had a long
teleconference where he talked through Speedy-Charge’s pitch deck and its
business model, which received interest.
Now...
We are at the first in-person meeting to discuss and negotiate terms for the seed
investment.
6

7. ACT I

8. 8

9. SPEEDY-CHARGE, INC. – (FOUNDER DRAFT)
Model of Capitalization Table
SERIES SEED
Pre-Money
Type Shares Options Total %
Class and Series of Capital Stock:
Common Stock
Founders 900,000 900,000 100.0%
Total 900,000 0 900,000 100%
9

10. SPEEDY-CHARGE, INC. – (FOUNDER DRAFT)
Model of Capitalization Table
SERIES SEED
Pre-Money
Type Shares Options Total %
Class and Series of Capital Stock:
Common Stock
Founders 900,000 900,000 90.0%
Option, Warrants and Other Securities:
Equity Incentive Plan
Granted/Committed - - 0.0%
Available for Grant (*) 100,000 100,000 10.0%
Total 900,000 100,000 1,000,000 100%
10

11. SPEEDY-CHARGE, INC. –
(FOUNDER DRAFT)
Model of Capitalization Table
SERIES SEED
Pre-Money Post-Money
Type Shares Options Total % Shares Options Total %
Class and Series of Capital Stock:
Common Stock
Founders 900,000 900,000 90.0% 900,000 900,000 60.0%
Others - - 0.0% 0 0 0.0%
Series Seed Preferred Stock 500,000 500,000 33.3%
Option, Warrants and Other Securities:
Equity Incentive Plan
Granted/Committed 0 - 0.0% 0 - 0.0%
Available for Grant (*) 100,000 100,000 10.0% 100,000 100,000 6.7%
Plan Increase, Seed 0 - 0.0% 0 - 0.0%
Total 900,000 100,000 1,000,000 100% 1,400,000 100,000 1,500,000 100%
11

12. INVESTOR DRAFT –
CAP. TABLE (15%)
Model of Capitalization Table
SERIES SEED
Pre-Money Post-Money
Type Shares Options Total % Shares Options Total %
Class and Series of Capital Stock:
Common Stock
Founders 900,000 900,000 90.0% 900,000 900,000 54.6%
Others - - 0.0% 0 0 0.0%
Series Seed Preferred Stock 500,000 500,000 30.4%
Option, Warrants and Other Securities:
Equity Incentive Plan
Granted/Committed 0 - 0.0% 0 - 0.0%
Available for Grant (*) 100,000 100,000 10.0% 100,000 100,000 6.1%
Plan Increase, Seed 147,059 147,059 8.9%
Total 900,000 100,000 1,000,000 100% 1,400,000 247,059 1,647,059 100%
12

13. INVESTOR DRAFT–
CAP. TABLE (15%)
Model of Capitalization Table
SERIES SEED
Pre-Money Post-Money
Type Shares Options Total % Shares Options Total %
Class and Series of Capital Stock:
Common Stock
Founders 900,000 900,000 77.5% 900,000 900,000 51.7%
Others - - 0.0% 0 0 0.0%
Series Seed Preferred Stock 580,645 580,645 33.3%
Option, Warrants and Other Securities:
Equity Incentive Plan
Granted/Committed 0 - 0.0% 0 - 0.0%
Available for Grant (*) 100,000 100,000 8.6% 100,000 100,000 5.7%
Plan Increase, Seed 161,290 161,290 13.9% 161,290 161,290 9.3%
Total 900,000 261,290 1,161,290 100% 1,480,645 261,290 1,741,935 100%
13

14. Act I
• Angel/seed/VC
• Valuation
• Cap table
• Pre-money
• Post-money
• Option plan
• Vesting
14

15. ACT II

16. Act II
• Convertible notes
• Preferred stock
• Priced round
• Conversion cap
• Pre-emptive rights
• Blocking rights / Protective provisions
16

17. ACT III

18. Act III
• Board seat / Observation right
• Information rights
• Timing
• Drafting
• Counsel
• Expenses
18

19. IF THERE WAS AN ACT IV…

20. Act IV
• Dividends
• Participating preferred
• Anti-dilution
• Weighted-average
• Registration rights
• Full ratchet
• ROFR
• Co-sale
• Drag
20

21. 21
Gitte Blanchet
Partner | 617-951-8211
gitte.blanchet@morganlewis.com
Julio Vega
Partner | 617-951-8901
julio.vega@morganlewis.com
Mike Conza
Partner | 617-951-8459
mike.conza@morganlewis.com
We love to talk…so don’t hesitate to call
THANK YOU
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