cap-table-validator

Cap Table Validator

Overview

The Cap Table Validator skill provides systematic validation of capitalization tables during due diligence. It verifies ownership accuracy, identifies potential issues, and models the impact of option pools and future financing on ownership structure.

Capabilities

Cap Table Verification

• Verify share counts against stock ledger
• Reconcile against Articles/Charter documents
• Check convertible instrument calculations
• Validate vesting schedules and exercise prices

Issue Identification

• Identify missing or incorrect 83(b) elections
• Flag accelerated vesting provisions
• Detect anti-dilution trigger scenarios
• Identify founder equity concentration issues

Option Pool Modeling

• Model option pool expansion impact
• Calculate fully diluted ownership
• Analyze option overhang and burn rate
• Project pool runway based on hiring plans

Convertible Modeling

• Model SAFE and note conversions
• Calculate pre-money vs. post-money impacts
• Analyze discount and cap mechanics
• Model multiple conversion scenarios

Usage

Validate Cap Table

Input: Cap table, supporting documents
Process: Verify calculations, reconcile documents
Output: Validation report, discrepancies found

Identify Issues

Input: Cap table, charter documents
Process: Check for common issues, flag concerns
Output: Issue list, severity assessment

Model Option Pool

Input: Current pool, hiring plan, grant guidelines
Process: Project pool usage, calculate dilution
Output: Pool projection, ownership impact

Model Convertibles

Input: Convertible instruments, conversion scenarios
Process: Calculate conversion outcomes
Output: Conversion analysis, ownership projections

Validation Checklist

| Category | Key Checks |

|----------|------------|

| Shares Outstanding | Match charter, stock ledger, cap table |

| Options | Verify grants, vesting, exercise prices |

| Convertibles | Terms accuracy, conversion mechanics |

| Documents | Board approvals, stock certificates |

| Tax | 83(b) elections, ISO limits, AMT |

Integration Points

• Legal Due Diligence: Core cap table review
• Cap Table Modeler (Agent): Support agent analysis
• Dilution Analyzer: Feed validated data for analysis
• Waterfall Calculator: Provide ownership for waterfall

Common Issues

• Outstanding convertibles not reflected
• Vesting calculation errors
• Exercise price discrepancies
• Missing or late 83(b) elections
• ISO/NSO classification errors
• Incorrect anti-dilution provisions
• Conflicting document versions

Best Practices

1. Request source documents, not just spreadsheets
2. Verify against Carta, Pulley, or stock admin system
3. Model all outstanding convertibles
4. Check for pending but unexecuted grants
5. Review recent charter amendments