When diligence starts, the cap table is one of the first things a reviewer opens. If the numbers don’t tie out, or a grant has no signed agreement behind it, questions pile up and the deal slows down. Most of the cleanup can happen before anyone asks, as part of getting diligence ready.
Work through it in this order.
1. Put every security on one list
List every class you have issued: common, preferred, SAFEs, convertible notes, options and warrants. Start with ownership as it stands today, based on shares actually issued. Then show fully diluted ownership, which means each holder’s share if every option, warrant, SAFE and note turned into shares. Label the assumptions behind that view, such as which instruments convert and whether the whole option pool counts, so a reviewer can follow the math. Anything that can convert into shares belongs on the table, not in a side file.
2. Tie each line to its signed document
For every issuance, find the agreement behind it: stock purchase agreements, SAFE and note documents, option grants and board approvals. If a line has no paperwork, flag it now. A missing signature is easier to resolve with company counsel before diligence than during it.
3. Reconcile the math
Check that units, percentages and dollars agree with each other, and that totals match your fully diluted share count. Spreadsheets drift over many rounds and edits, so recalculate instead of trusting old formulas.
4. Model conversions and the option pool
Keep modeled numbers apart from today’s table. Show how SAFEs and notes would convert, and how much of the option pool is granted versus still available, and label the assumptions each model uses. Reviewers will ask what ownership looks like after the next round, so present that as its own scenario, not as current ownership.
5. Keep a history, not just the current table
Record what changed, when and why. Each termination, forfeiture, exercise and transfer should have a date and a source document. Put an as-of date on every version you share, so no one has to guess which table is current.
6. Line up the rest of the room
The cap table sits next to corporate formation records, financials and tax, material contracts and IP assignments. A checklist across those categories shows what’s done and what’s still missing. If a Trusted Advisor helps you prepare, give them the same list.
Example (illustrative, not a real company)
A founder finds two early advisor grants on the spreadsheet with no signed grant agreements. They flag the gap for company counsel and the board to review before the investor’s counsel asks. Once it is resolved, the founder updates the records and keeps the supporting documents with the table. Raising it early keeps it from turning into an open question in the middle of diligence.
Where Diligence Ready fits
Diligence Ready keeps your cap table on one reconciled ledger, with each issuance linked to its agreement and a full audit trail. The diligence room adds a built-in checklist, a what’s-missing list and role-based access for investors, advisors and counsel. Your files can stay in your own Google Drive or OneDrive.