By the time a founder we advised got to their Series A term sheet, the cap table had four different SAFEs, an advisor grant nobody could locate the paperwork for, and a spreadsheet that didn’t match any of it. Here’s how the cleanup went, and why it happened just in time.
What the mess actually was
Three SAFEs raised over eighteen months, each with a different valuation cap, plus a fourth converted from a friends-and-family note with terms nobody had modeled against the others. An advisor equity grant existed in a Slack message and nowhere else. None of it was malicious — it was the ordinary residue of moving fast with no one dedicated to keeping the paperwork current.
Why it nearly killed the round
The Series A lead’s counsel found the discrepancy during diligence — the founder’s stated ownership percentage and the actual, fully-diluted math didn’t match by almost four points. That’s not a rounding error to an institutional investor; it’s a signal that nobody has been tracking the numbers precisely, which raises the question of what else hasn’t been tracked precisely. The deal didn’t die, but the lead’s confidence took a real hit at the worst possible moment — three weeks before signing.
The fix, and the fifty-hour rule
We rebuilt the cap table from source documents — every SAFE, every grant, every conversion — and reconciled it against the fully-diluted model the investor’s counsel had built independently. They matched within a rounding error, and the round closed on schedule. The rule we now give every founder: rebuild your cap table from source documents at least once a year, whether or not you’re raising. Discovering an inconsistency in a quiet quarter costs an afternoon. Discovering it during diligence costs weeks and trust you don’t get back.
Want your cap table checked before an investor’s counsel does it for you? Get in touch.
