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SEED (AND VENTURE) FINANCING
A PLAY IN THREE ACTSNOVEMBER 1, 2016
Will Perkins, Partner
Dinesh Melwani, Partner
Stef Lefebvre, Associate
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CAST
Founder #1: Dinesh Melwani
Dinesh has spent many years in business development at a large technology company, TechCo. He andStef are contemplating leaving to launch a new tech start-up, SpeedyCharge. Dinesh has estimated thatSpeedyCharge needs between $750,000 to $1,000,000 to develop a beta version of the product and placeit with a local electric car club who have signed on to beta test it.
Founder #2: Stef Lefebvre
Stef, like Dinesh, has spent many years at TechCo, in engineering. He and Dinesh met about six monthsago and discovered a mutual interest in electric cars. Stef was working on an idea at night and onweekends that addressed charging times for electric vehicles. Having spotted the growing interest inelectric cars, Dinesh and Stef started further work to develop a product that sits between the power source(i.e., wall plug) and the car charging port that speeds charge times by 30%-50% (in early lab tests of acrude prototype).
Seed Investor: Will Perkins
Will, a lawyer by training, now spends his time investing in early-stage growth companies, and togetherwith his group of old friends, coordinates their angel/seed investments.
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SETTING
Previously...
Originally introduced by email through a mutual connection, Dinesh and Will had a long teleconferencewhere Dinesh talked Will through SpeedyCharge’s pitch deck and its business model. Will expressed aninterest in investing, subject to meeting in person to discuss and negotiate agreeable terms.
Now at BeerHall...
Dinesh and Will are meeting in person for the first time at a local craft beer pub to discuss and negotiateterms for Will’s seed investment.
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SPEEDYCHARGE
SPEEDY-CHARGE, INC.
Model of Capitalization Table
as of February 29, 2016
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%
SPEEDY-CHARGE, INC.Model of Capitalization Table
as of February 29, 2016
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%
SPEEDY-CHARGE, INC.Model of Capitalization Table
as of January 19, 2016
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%
SPEEDY-CHARGE, INC.
Model of Capitalization Table
as of January 19, 2016
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%
SPEEDY-CHARGE, INC.
Model of Capitalization Table
as of January 19, 2016
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%
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ACT I
• Angel/seed/VC ❒
• Valuation ❒
• Cap table ❒
• Pre-money ❒
• Post-money ❒
• Option plan ❒
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SPEEDYCHARGE
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ACT II
• Convertible notes ❒
• Preferred stock ❒
• Priced round ❒
• Conversion cap ❒
• Vesting ❒
• Pre-emptive rights ❒
• Blocking rights ❒
• Protective provisions ❒
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SPEEDYCHARGE
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ACT III
• Board seat ❒
• Observer ❒
• Information rights ❒
• Timing ❒
• Drafting ❒
• Counsel ❒
• Expenses ❒
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ACT IVWhat didn’t come up...
• Dividends ❒
• Participating preferred ❒
• Anti-dilution ❒
• Weighted-average ❒
• Registration rights ❒
• Full ratchet ❒
• ROFR ❒
• Co-sale ❒
• Drag ❒
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William [email protected]
THANK YOU
Call us -- we genuinely love these topics and arealways happy to brainstorm and answer questions.
Dinesh [email protected]
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