Our compact investor-facing structure + justification

This is our compact investor-facing structure + justification we are using to pitch the $10,000 for 5,000 shares as the “founder/first-demo” anchor investor, plus the concrete math so it doesn’t feel fuzzy.

1. Deal framing / pitch summary for the accredited investor

Headline:
“Invest $10,000 to fund the initial demo and compliance buildout in exchange for 5,000 shares—10× the share count of the broader first tranche—because you’re seeding the high-risk, high-leverage phase that makes the $900 M vision credible, while strategic dilution for future hardware purchases preserves your dollar value and ensures founders retain 55%+ control.”

Why the premium (why 5,000 vs. 500):

Risk arbitrage: You’re funding the very first demo and the bridge to HIPAA compliance. That’s the binary inflection point—either the platform proves tech+compliance viability or the raise stalls.
Strategic dilution & growth: As we issue new shares to raise capital for GPU hardware (valued $60 K–90 K) and other value‑adding upgrades, your initial $10 K stake retains its full dollar value through a weighted‑average anti‑dilution mechanism, even as the overall share count grows.
Capital efficiency: $10 K enables demo build; the next $30 K (full HIPAA compliance) plus GPU stack scaling are financed through subsequent share issuances, accelerating milestone cadence without eroding your position’s real value.
Leverage to the large vision: This initial tranche activates the value‑creating funnel that leads into the larger private offering ($300 K first round, scaling toward $900 M). Early validation de‑risks follow‑on rounds.
Founder alignment & control: Strategic dilution is managed to maintain trustees’ control at 55%+ post‑hardware raises, while your “first mover” upside is supercharged if later rounds close at higher valuations.
Strategic Dilution and Growth! – JamesPolk.net

Use of funds (first $10 K):

Build and deliver the first working demo of the HIPAA‑aware legal document LLM chat system.
Prove the Dockerized pipeline: document ingestion → CourtListener integration → code interpolator hookup.
Establish initial compliance scaffolding (audit logging, segmented data domains) to make the next compliance step smoother.

Milestones unlocked by this $10 K:

Demo delivered and validated with internal/test cases.
Technical “proof of separation” for HIPAA/financial domains documented (needed for compliance narrative).
Clear pitch materials + technical evidence to raise the next $30 K for full HIPAA compliance.

2. Simple cap table slice (illustrative)
Assume the first round’s standard entry is $10 K → 500 shares implied at $20/share.

Investor / Tranche	$ Invested	Shares	Price/Share	Notes
Anchor/demo investor (you)	$10 000	5 000	$2	High‑risk premium; initial anti‑dilution protects your $10 K stake as new shares are issued.
Other first‑round investors (up to $300 K)	$10 000 ea.	500 ea.	$20	Standard entry price.
Subsequent hardware‑raise (GPU, $60–90 K)	$60 000	2 400*	$25	New issuance to fund hardware; weighted‑average anti‑dilution protects early stakes.
Founders & team (post all raises)	—	55 000+	—	Controlled issuance preserves >55% founder ownership.

*Illustrative: 2 400 shares at $25 to raise $60 K.

Implied dilution & future upside: As we issue new shares for growth (compliance, hardware, talent), your $10 K stake remains worth $10 K in share count. If a later round closes at $100/share, your 5 000 shares yield $500 000 (50×) on a $10 K ticket.

3. Mini term sheet for the $10 K anchor

Security: Early‑class common shares (with anti‑dilution protection).
Amount: $10 000
Shares: 5 000
Price per share: $2
Anti‑dilution protection: Weighted‑average adjustment on any future issuances for capital raising (e.g., hardware, compliance) to preserve the dollar value of the anchor stake.
Vesting / lockup (optional): 6‑month lockup or prorated release tied to follow‑on participation.
Founder control: Post‑issuance structure capped to maintain founders’ ownership at ≥55%.
Information rights: Bi‑weekly updates on milestone progress for the next 3 months.
Use of proceeds: Demo delivery, HIPAA compliance prep, foundational infrastructure.
Right of first refusal: Option to participate pro rata in the immediate next hardware‑raise tranche at its terms.

4. Quick investor talking points / script

“You’re the first financier of our HIPAA‑compliant AI legal document intelligence engine—this moment bridges concept to licenseable product, so your risk is highest and your upside is largest.”
“Your $10 K buys 5 000 shares at $2 each; later first‑round investors pay $20/share for the same dollar amount—rewarding the bridge capital that turns demo into deployable compliance.”
“We’ll issue new shares to fund GPU hardware and full compliance without eroding your $10 K stake, thanks to weighted‑average anti‑dilution, while founders retain 55%+ control.”
“Delivering this demo unlocks the next $30 K for HIPAA certification and primes us for scalable offering phases.”
“You also get priority access and pro‑rata rights in the hardware‑raise and subsequent rounds—so you’re not just an early investor, you’re our strategic anchor.”

5. Optional add‑ons to boost conviction

Demo roadmap slide: Week 0–2: demo build → Week 2–4: HIPAA compliance prep → Week 4–6: compliance kickoff → Week 6–8: GPU procurement.
Waterfall upside example: If next professional round prices at $100/share, 5 000 shares = $500 000 on a $10 K ticket (50×).
Strategic dilution graphic: Show how new share issuances for hardware increase total shares but preserve early‑stake value, and maintain founders at >55% post‑issuance.

Based on strategic dilution and growth principles: new shares fund hardware, adding value without devaluing early stakes, and maintaining majority control through cap limits and weighted‑average anti‑dilution as detailed in our strategic dilution framework.

Strategic Dilution and Growth! – JamesPolk.net