Your cap table isn’t just a spreadsheet. It’s your control panel.

A founder once called me right after closing their Series A.

The answer was simple: cap table drift.

In the early days, it’s tempting to give away equity like candy—co-founders, advisors, team, even that one “mentor” who never showed up again.

It feels generous. Until you try to raise your next round.

That’s when your cap table tells the truth—who owns the future of your company.

Let’s break down the mistakes that lead founders to regret, and the habits that prevent it.

Step 1: Stop Treating Equity Like Gratitude

The most common mistake?

Giving equity for presence, not performance.

Equity is not a thank-you note. It’s a long-term ownership right.

Instead of:

• “He helped me with my first deck—let’s give him 2%”

Try:

• “Let’s offer 0.25% as an advisory equity vesting over 2 years if deliverables are met”

Generosity now can become dilution later.

Always tie equity to value creation, not early friendship.

Step 2: Build a Vesting Culture—Even for Co-Founders

Co-founder splits are emotional. But cap tables must be logical.

Mistake:

50–50 splits with no vesting, just because you started together.

Reality:

Not all co-founders stay the course. You need protection.

Best practice:

• Standard 4-year vesting with 1-year cliff

• Revisit equity splits every 12–18 months based on contribution

• Put it in writing—even if you’re “like brothers”

Equity without vesting = potential deadweight on your table.

Step 3: Avoid Over-Dilution Early On

Many founders give away 20–30% equity in the first angel round.

Result: By Series A, you're under 50%. By Series B, you're in the passenger seat.

Avoid this by:

• Raising what you need, not what impresses

• Exploring SAFE notes or convertible instruments with valuation caps

• Keeping a clean ESOP plan upfront to prevent future squeezes

You don’t need to own everything.

But you need to own enough to lead.

Step 4: Keep the Cap Table Clean and Current

Sloppy cap tables = lost investor confidence.

Avoid:

• Missing founder agreements

• Unconverted notes still floating

• Multiple “advisors” with undefined terms

• No ESOP pool adjustments over time

Adopt:

• A quarterly cap table audit

• Software tools like Carta, Qapita, or good ol’ structured Google Sheets

• Legal reviews after every fundraise

A clean cap table is like a clean kitchen—you’ll cook better deals in it.

Step 5: Think Like Your Future Investor

Before you issue equity, ask:

They’ll ask:

• How much does the founding team still own?

• Are the ESOPs structured and fair?

• Are there legacy holders creating friction?

Cap tables are not just for now. They’re a story of your past—and a forecast of your future.

Make it a story that invites investment.

TL;DR – Too Long; Didn’t Read

• Don’t give equity for goodwill—tie it to results with vesting.

• Use co-founder vesting and revisit splits as roles evolve.

• Avoid early-stage dilution traps—protect ownership for the long run.

• Keep your cap table updated, audited, and investor-ready.

• Think forward—your cap table should reflect clarity, not confusion.

Equity isn’t just about ownership.

It’s about alignment, leverage, and leadership.

Protect it. Clean it. Grow into it.

Because one day, you’ll pitch someone who reads your cap table before your deck.