From option pools sized by guesswork to missing board consents, the early errors that come back to bite at diligence — and how to avoid them.
Most cap table problems do not start as problems. They start as a quick spreadsheet edit before a deadline, a verbal agreement that never made it into a document, or an option grant that was promised but never formally issued. By the time a term sheet lands, those small gaps have compounded into diligence headaches.
1. Sizing the option pool by guesswork
A pool that is too small forces a top-up mid-round; one that is too large dilutes founders unnecessarily. Model the next 18 months of hiring before you set the number, and revisit it each round.
2. Promising equity without papering it
An offer letter is not a grant. Until a board consent issues the shares or options with a strike price and vesting schedule, the equity does not exist on your cap table — and it will surface at the worst possible moment.
3. Letting the spreadsheet drift
Every manual edit is a chance to break a formula. A single mistyped share count can throw your fully-diluted ownership off by a percentage point, which matters enormously when you are negotiating a round.
4. Forgetting non-US structures behave differently
If you are incorporated in BVI, Cayman, Hong Kong or Singapore, the mechanics of issuing and transferring shares are not identical to a Delaware C-corp. Tooling that assumes Delaware will quietly mislead you.
5. Treating compliance as an afterthought
Filings and renewals do not wait for your fundraising timeline. Missing one can hold up a close. Track deadlines in the same place you track your equity, not in a separate calendar nobody checks.
None of these are hard to avoid — they are hard to remember when you are heads-down building. A single source of truth for your equity, rounds and compliance is the simplest insurance against all five.
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