Setting up the cap table and choosing a tool

1. Core idea and who it's for#

A cap table is the record of who owns what in the company. It lists every share, option, warrant, SAFE and convertible note, and who holds it. Investors price a round from your fully diluted share count, and every grant, transfer and round has to be recorded. A cap table that doesn't match the legal documents slows down every raise and every sale.

There are three layers, and they must agree:

1. The legal record: share certificates, the statutory register of members, board and shareholder resolutions, and filings with the registrar.
2. The working cap table: a spreadsheet or software showing issued shares, the option pool, grants and vesting, and convertibles, on a fully diluted basis.
3. The model: scenarios for the next round, including how SAFEs or notes convert, pool top-ups and dilution.

Who it's for: founders at incorporation and before the first grant or raise. A spreadsheet is fine at first. Move to software once you have SAFEs, options or more than about 10 holders.

The one-line rule: record every equity event the day it happens, back each line with a signed document, and pick a tool you can leave easily, keeping your own exports.

2. Evidence#

Tools can disappear, so own your data. Pulley, a Stripe-backed cap table platform used by many seed-stage startups, announced on 15 September 2026 that it would shut down on 8 December 2026. Customers had until 30 November to opt into an arranged move to Carta. Pulley says limited data access will continue until 31 January 2027. One 2026 review also reports that AngelList Stack is closed to new customers. The lesson: choose a tool you can export from, and keep your own copies.

Free tiers cover most pre-seed companies.

• Carta Launch is free for companies with under 25 stakeholders that have raised under $1 million.
• Qapita, strong in India and South-East Asia, has a free Spark plan for up to 25 stakeholders and under $1 million raised.
• EquityList is free for 10 stakeholders, then $1,200 a year for 35.
• Ledgy is free for up to 50 stakeholders, and Eqvista is free under 20.
• UK: Vestd's self-serve plan starts at £2,200 a year. SeedLegals bundles a cap table with UK funding-round and option documents.

Prices change often, so check them before you sign up.

The cost of getting it wrong. One reviewer warns that by the time cap table errors surface in diligence, the fix is "a six-figure legal cleanup, not a five-minute software setup". That is an exaggeration for most seed companies, but the direction is right. Common errors include:

• options granted without board approval;
• shares promised but never issued;
• SAFEs modelled on the wrong basis (pre-money or post-money);
• missing 83(b) elections in the US;
• Indian allotments not filed with the registrar.

409A and valuations. In the US, options need a strike price at or above a defensible fair market value, usually set by an independent 409A valuation. Many cap table tools bundle one. Indian ESOP grants and UK EMI options have their own valuation rules (5.01).

3. Method#

Step 1: Set up the structure at incorporation

Pick a share count that leaves room.

• US: often 10,000,000 authorised common shares, with founders taking about 8 to 9 million at a fraction of a cent each.
• India: authorised capital large enough for founder shares, the pool and the first round, with a face value of ₹1 or ₹10.
• UK: issue founder shares at a small nominal value, such as £0.0001.
• Columns to track for every line: holder, instrument, class, number, price paid, date, vesting schedule, certificate number and the approval reference.
• Fully diluted view: issued shares, plus the whole pool (granted and ungranted), plus warrants, plus SAFEs and notes converted on an assumed basis.

Step 2: Record every event with its paperwork#

Step 3: Model before you sign#

Before any term sheet, model how all SAFEs and notes convert. Post-money SAFEs fix the investor's percentage, pre-money ones don't. Model whether the pool top-up comes before or after the new money (5.01), and what founders own afterwards. Check this against the investors' model. Gaps of 0.5% or more usually mean an assumption error.

Step 4: Choose a tool#

• Under 10 holders, no options: a well-kept spreadsheet backed by the statutory register is fine.
• SAFEs, options or 10 or more holders: use software.
  • India: Qapita or EquityList.
  • US: Carta or EquityList, or another tool with 409A support.
  • UK: SeedLegals, Vestd or Ledgy, for EMI support.
• What to check before choosing:
  • support for your country's instruments (CCPS, EMI, ISOs);
  • investor and employee portals;
  • full data export;
  • pricing as you grow;

the company's own financial stability.

• Every quarter, export the full cap table and transaction history to your own storage.

Worked example (illustrative)#

A US hardware startup with an Indian subsidiary has 3 founders, 2 post-money SAFEs ($750,000 at an $8 million cap) and 6 employees with options. It used Pulley.

• September 2026: Pulley announces its shutdown. The CFO exports the cap table, drafts, grant documents and the 409A reports that week.
• Choice: they compare Carta, which runs Pulley's arranged migration with price matching, against two alternatives on India ESOP support and export options. They pick the one that handles their Indian employees' grants best.
• Reconciliation: while migrating, they reconcile against signed documents. One grant was approved at a board meeting but never sent to the employee. Counsel checks whether the strike price still matches a current 409A, and the board re-approves the grant on that basis.
• Result: by the seed round in January, the cap table, the register and the documents all match.

4. India, US and UK differences#

India demat note: the 2023 rules on dematerialising private company shares are a frequent surprise. Once they apply, new shares must be issued in demat form through a depository participant, and founders need demat accounts. Check your company's status with your company secretary early.

5. Scripts, mistakes and related playbooks#

Scripts#

To your board, adopting a recording rule:

"From today, no equity is promised or granted without a board approval and a signed document, and the cap table is updated the same week. I'll circulate a fully diluted cap table with every board pack."

To a new hire asking about their options:

"Your grant is approved and recorded. You'll get a login to see your vesting, and I'll send a PDF of your grant letter for your own records."

To investors' counsel before a round:

"Here is our fully diluted cap table, with a list of every supporting document and our SAFE conversion model. Please flag any differences from your model early."

Common mistakes#

1. Verbal equity promises that never get documented.
2. Grants without board approval or a valid valuation at the time.
3. SAFEs modelled wrongly, for example a post-money SAFE treated as pre-money.
4. Software and register out of sync, with the Indian register, filings and demat not matching the tool.
5. No exports. If your tool shuts down or changes pricing, you're stuck.
6. Ignoring transfer formalities, such as stamp duty, approvals and register updates.
7. Too few authorised shares or too little capital, forcing amendments at awkward times.

Related playbooks#

• 3.05 Splitting founder equity
• 3.06 Founder vesting, cliffs and acceleration
• 4.06 Shareholder agreement basics
• 4.07 Articles of association and bylaws
• 4.18 Compliance calendar
• 5.01 ESOP pool sizing
• 5.04 Allocating equity by level

Sources#

• BPM, Pulley is shutting down
• Sacra, Pulley company profile
• WaveUp, Best cap table management software in 2026
• G2, Carta pricing
• Qapita, Top cap table management software for startups 2026
• Rework, Best Pulley alternatives in 2026

This playbook is general information, not legal or tax advice. Tool prices and features change often, so check current terms before choosing. Last checked November 2026.