Introduction

If your startup is gearing up for a fundraise—especially Series A or later—your cap table is going to be one of the first documents investors dig into. And if it’s messy, inaccurate, or unclear, it can derail the entire process.

At Zecca Ross Law, we’ve helped dozens of founders avoid cap table chaos before term sheets are on the table. Whether you’re issuing SAFEs, converting notes, or granting stock options, working with outside counsel early can make the difference between a smooth diligence process and a deal-breaking scramble.

Here’s how experienced startup attorneys can help clean up your cap table before it becomes a liability.

1. Unwind Past Mistakes Before They Compound

Startups often issue equity informally in the early days—verbal promises to co-founders, handshake advisor deals, or incorrectly documented option grants. When left uncorrected, these can become serious problems:

  • Misaligned ownership percentages
  • Unvested or undocumented shares
  • Conflicts over dilution or control

Outside counsel can review your existing records, flag inconsistencies, and help you unwind or memorialize past equity decisions correctly.

2. Properly Document SAFEs, Convertible Notes, and Equity Grants

If you’ve issued SAFEs or convertible notes, have you tracked:

  • Conversion triggers and valuation caps?
  • Whether they've been amended, paid back, or converted?
  • The effect of a potential financing on fully diluted shares?

We help founders translate these instruments into cap table math, working with your accountant or finance team to model how different investment scenarios will play out. That gives you clarity before you're negotiating terms with investors.

3. Align with Your 409A Valuation and Option Pool Planning

When did you last update your 409A valuation? Are you planning to expand your option pool before a fundraise (hint: most investors will ask you to)? Are your option grants properly documented and board-approved?

We regularly help clients:

  • Draft board resolutions approving equity grants
  • Prepare option grant letters and vesting schedules
  • Coordinate with valuation firms to ensure IRS compliance

Getting this right now avoids massive headaches later.

4. Build an Investor-Ready Equity Data Room

Investors will eventually ask to review:

  • The cap table (fully diluted and post-money projections)
  • Stockholder agreements and equity incentive plans
  • Board and shareholder resolutions approving equity grants
  • Any SAFE, convertible note agreements, warrant agreements, and side letters

We help founders build a clean, defensible data room that can withstand investor scrutiny—saving time during diligence and signaling that you’re operating at a high level.

5. Protect Against Legal and Tax Surprises

A messy cap table doesn’t just slow down deals—it can open the door to:

  • Tax liability for improperly issued shares
  • Lawsuits from founders, employees, or advisors
  • Audit flags during an eventual acquisition or IPO

By engaging outside counsel to audit and clean your equity records proactively, you protect your company and show investors that you take governance seriously.

Zecca Ross Law Can Help

As part of our Outside General Counsel services, Zecca Ross Law advises startups and scaling companies on cap table management, equity structuring, and fundraising strategy. We don’t just clean up your cap table—we help future-proof it.

Need help before you raise?

Let’s talk.

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