Jaime Medina
Not every admin or financial detail will win you the game, but get it wrong, and you might just lose. The cap table is a perfect example.
It’s one of the first things investors ask for, alongside your pitch deck and business plan. Why? Because your cap table tells a deeper story: how aligned are the incentives between founders, team members, and investors? Who’s truly committed to building, and who’s just along for the ride?
We often come across startups where the founding team holds less equity than they should. It’s a dangerous setup, not just because they lose control, but because their incentives fade long before the business gets traction. If you’re full-time and deeply involved, your ownership needs to reflect that. Otherwise, future dilution will reduce your stake to the point where motivation and alignment break down.
Another common issue: large chunks of equity in the hands of co-founders who are no longer active. This isn’t just a technicality, it’s a red flag. It tells investors the team isn’t fully committed, and it locks up equity that could be better used to attract and retain new talent. It shows a lack of “skin in the game” from those who should be driving the company forward.
A healthy cap table is critical, especially if you’re aiming to raise from VCs. Many founders build great businesses but can’t raise capital because the structure is broken. In some cases, that’s due to the company’s past as a traditional SME, but if venture funding is your next step, restructuring the cap table becomes inevitable.
The takeaway? Align ownership with contribution. Prioritize incentives. And remember, it’s better to have the tough conversations early,before your cap table becomes a problem you can’t fix.
