Equity · Basics

Cap table management: keeping the record true.

What the job actually involves, when a spreadsheet stops working, who owns each recurring task, and what investor counsel finds when they rebuild your table from the documents.

Glide Research11 Aug 202614 min read

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In short

What is cap table management?

Cap table management is the ongoing work of keeping a company's record of who owns what reconciled to the documents behind it: the stock ledger, board consents, executed stock purchase and option agreements, valuation reports, and tax filings. It is a bookkeeping discipline with legal consequences, not a piece of software you buy once.

Written for a Delaware C-corporation unless stated otherwise · law and filing references checked 11 Aug 2026

Key takeaways

The cap table is a derived view. The authoritative records are the stock ledger, board consents and minutes, signed grant and purchase agreements, valuation reports, securities filings, and copies of any 83(b) elections.
A spreadsheet is genuinely adequate at incorporation and stays adequate for a while. It stops being adequate at a set of identifiable events, not at a company age or a headcount.
Under Delaware law, stock issued without proper authorization is not automatically void — DGCL § 204 provides a ratification route — but the fix is a formal board and stockholder process, or a Court of Chancery proceeding under § 205. It is not an edit to a spreadsheet.
Increasing the number of authorized shares means amending the certificate of incorporation under DGCL § 242, which requires board and stockholder action.
A section 83(b) election must be made no later than 30 days after the date of transfer. The individual files it, but the company is usually the only party holding a copy, which is why missing copies are a recurring diligence finding.
Form 3921 is an annual information return a corporation files for exercises of incentive stock options under section 422 — a recurring obligation tied directly to cap table events.
Delaware annual report and franchise tax are due on or before March 1 each year, and the franchise tax calculation depends on authorized shares, issued shares, and gross assets. An inaccurate cap table produces an inaccurate filing.

What cap table management actually is

A cap table is a summary. It is what you get when you add up everything the company has actually done: every share issued, every option granted, every SAFE or convertible note signed, every transfer approved, every repurchase completed. The guide at /equity/cap-table covers what belongs in that summary. This page is about the harder part — keeping the summary true.

Nothing in the summary is self-executing. A row in a spreadsheet does not issue a share. The board authorizing an issuance, and the company recording it, issues a share. When the summary and the documents disagree, the documents win and the summary is simply wrong — often in a way nobody notices for two years, because everything downstream is computed from the wrong number. Ownership percentages, option pool headroom, and every dilution model built on them inherit the error. The mechanics of how those percentages move are covered at /equity/dilution.

So the activity has a concrete shape: after anything that changes ownership, someone reconciles the summary against the underlying record and fixes whichever one is wrong. Software makes that faster and harder to get wrong. It cannot do it for you, because the inputs are human decisions that have to be approved before they are recorded.

When a spreadsheet stops being enough

A spreadsheet is a perfectly reasonable cap table for a newly incorporated company with two founders, one share class, and nothing else outstanding. Anyone who tells you otherwise is selling something. The honest question is not whether spreadsheets are bad; it is which specific events make one unreliable.

The triggers are events, not milestones. A company can pass several of these and still be fine, or hit one and immediately be in trouble.

More than a handful of option holders, each with their own grant date, vesting start, cliff, and exercise activity to track separately.
A priced round closes and the company now has preferred stock with liquidation preferences and conversion terms — see /equity/share-classes — plus a real stock ledger that has to reconcile to it.
SAFEs or notes start stacking, with different caps and discounts that convert at different amounts on the same event.
The first repurchase, cancellation, or secondary sale. Removing shares correctly is where most hand-maintained tables first break.
Employees begin asking what they hold and what it is worth, and expect an answer that is not a screenshot emailed by a founder.
Form 3921 season arrives and someone has to assemble exercise data for the prior calendar year from records that were never organised for it.
Two people quote different ownership percentages in the same meeting. This is the one that actually decides it.

Spreadsheet, software, or the law firm

There are three common arrangements, and each is genuinely better than the others at something. Companies routinely run two at once — counsel holding the definitive ledger while the founders model scenarios in a sheet — which is fine as long as everyone knows which one is authoritative.

Three ways companies actually keep the record

Even-handed by design. Spreadsheets win several of these rows outright, and pretending otherwise is how vendor content loses trust.

Three ways companies actually keep the record
Feature	Spreadsheet	Dedicated cap table software	Maintained by company counsel
Direct costVendor and law firm pricing is published by each provider and varies by stage. No figures are quoted here.	Effectively nothing	A recurring subscription	Billed as legal time
Who can change it	Anyone with the link, silently	Role-based, usually with an approval step	The firm, on written instruction
Audit trail of changes	Version history at best; easily bypassed by a copy	Designed in, typically immutable and per-user	The correspondence file and the firm’s own records
Documents linked to the entries	A folder somewhere, by convention	Grant and consent documents attached to the record, often with e-signature	Held by the firm with the executed originals
Scenario and waterfall modelling	Whatever you build, and you can build anything	Built in, and constrained to the instruments it models	Usually on request, not self-serve
Employees can see their own holdings	No — someone has to email them	A portal is the norm	No
Valuation workflow attached	Separate engagement	Often bundled or integrated	Coordinated by the firm, performed by a valuation provider
Getting your data outAsk this question before you sign anything, not after.	Trivial — it is your file	Depends entirely on the export the vendor provides	The firm returns the file, on the firm’s timeline
Works with no internet, no vendor, no account	Yes	No	No
What happens at diligence	Counsel rebuilds it from the documents to confirm it	Counsel still checks it against the documents, but starts from a structured export	Already assembled, because the firm holds the originals

Qualitative comparison of common arrangements, not a product review. Pricing is set by each vendor and firm and is published on their own sites. No specific product is characterised here.

Named products differ in what they are built around rather than in whether they work. Carta is the largest and also runs 409A valuations and fund administration. Pulley is founder-focused with scenario modelling. Ledgy is strong for European and multi-jurisdiction equity and for employee-facing communication. AngelList is bundled with fund and SPV formation. Which of those framings matches your company is a better question than which vendor is best.

Who owns each job

"The software owns the cap table" is never true. A vendor holds the record. A human still has to approve the grant, sign the document, and check that the two match. The distribution below is typical for a venture-backed Delaware C-corp; smaller companies collapse several rows into one person, which is normal but worth being explicit about.

Recurring cap table jobs and who normally does them
Recurring job	Usually done by	Why it lands there
Approving an issuance or grant	The board, or a committee acting under delegated authority	Authorization is a board act. A record of it created afterwards is not the same thing.
Setting the exercise price	The board, using a current valuation	Pricing off a stale valuation is one of the most common findings in later review.
Signing and countersigning grant paperwork	An authorized officer, then the recipient	An unsigned or undelivered grant is not a grant, whatever the table says.
Maintaining the stock ledger	The company — in practice a finance or ops lead, or a transfer agent or software vendor acting for it	The ledger is a company record. Delegating who types into it does not delegate responsibility for it.
Reconciling the cap table to the ledger and documents	Finance or operations lead	It is usually the only role that sees both the summary and the paperwork.
Tracking transfer restrictions and rights of first refusal	Company counsel, recorded by whoever holds the ledger	DGCL §§ 201–202 govern transfers and restrictions on them, so a table of share counts alone is incomplete.
Filing a section 83(b) election	The individual recipient files it; the company keeps a copy	It must be made no later than 30 days after the date of transfer, and the company copy is what diligence asks for.
Filing Form 3921 for ISO exercises	The corporation, usually with its accountant	An annual information return driven entirely by cap table events from the prior year.
Securities exemption analysis for grants	Company counsel	Rule 701 is commonly relied on for compensatory grants by non-reporting companies and carries disclosure conditions above certain thresholds.
Delaware annual report and franchise tax	The company, from authorized and issued share data	Due on or before March 1 each year; the tax calculation depends on those share counts and on gross assets.
Independent confirmation	Auditor, or investor or acquirer counsel	They check the table against the documents, not against itself.

General description of common practice and of the cited filing obligations. Not legal or tax advice; how any of this applies to a specific company is a question for its counsel and accountant.

The hygiene loop

Cap table management is mostly a small number of checks performed at fixed moments. The point of tying them to events rather than to a calendar reminder is that the events are when things change, and a discrepancy is far cheaper to fix in the week it appears.

What to reconcile, and when

After every board meeting or written consent
Match each approved issuance, grant, repurchase, or transfer against what is now recorded. Check that the recorded date is the approval date, not the date someone got round to typing it in, and that nothing was recorded that the board did not approve.
Same week
After every grant batch
Confirm each grant has a signed agreement, a vesting start date that matches the approval, and an exercise price supported by the valuation in force on the approval date. Confirm the remaining pool headroom after the batch. Pool mechanics are covered at /equity/option-pool.
Same week
After every financing or conversion
Rebuild the post-close table from the executed documents rather than from the model that was circulated during negotiation. Convert every SAFE and note on the terms in the signed instrument, and check the closing table against the one in the closing set.
At close
Every quarter
Total issued shares against the ledger. Compare issued and reserved shares against the authorized count — the distinction is explained at /equity/authorized-vs-outstanding-shares. Confirm every terminated employee has had their post-termination exercise window applied and unvested shares cancelled.
Quarterly
Before year end and the Delaware filing
Freeze the authorized and issued share counts you will report, because the franchise tax calculation depends on them along with gross assets. Assemble the prior calendar year’s ISO exercises for Form 3921. Confirm the 83(b) copies you are supposed to hold are actually in the file.
Report and tax due on or before 1 March

What happens in diligence

The moment a company finds out whether its cap table was managed is when a lead investor’s or an acquirer’s counsel asks to see the record. They do not accept the table. They rebuild it from the documents and compare.

How the review actually runs

They request the underlying record
The stock ledger, the certificate of incorporation and every amendment, all board and stockholder consents and minutes, every executed stock purchase and option agreement, the option plan and its reserve history, valuation reports, securities filings, and copies of 83(b) elections.
They rebuild the table from those documents
Share by share, grant by grant. The company’s own table is treated as an assertion to be tested, not as evidence.
They list what does not reconcile
The recurring findings are consistent across companies: grants dated before the board approved them, grants priced off a superseded valuation, missing 83(b) copies, transfer restrictions and rights of first refusal that were never tracked, shares purportedly issued beyond the authorized count, and a spreadsheet that no longer agrees with the ledger.
Counsel proposes a fix for each one
Some are clean-ups. Some are not. Delaware provides a route for defective corporate acts: DGCL § 204 states that no defective corporate act or putative stock is void or voidable solely because of a failure of authorization if it is ratified under that section or validated by the Court of Chancery under § 205. That is a real remedy, and it is a formal board and stockholder process or a court proceeding — not an edit. Raising the authorized count is likewise an amendment to the certificate under § 242, requiring board and stockholder action.
The cost lands as time
The legal hours are real but usually not what hurts. What hurts is the weeks added while consents are drafted, signatures are chased from people who left years ago, and a term sheet sits open. Momentum is the thing that dies.
Description of common practice. Whether any particular defect is curable, and how, is specific to the facts and to the company’s counsel.

Questions worth asking a vendor

Feature lists are the least informative comparison available. The questions that differentiate are about control and exit. Who has edit rights, and is there an approval step before a grant is recorded? Is there an immutable audit log, or just a version history? Can you export the complete ledger and every attached document, in a usable form, without asking for help? Does it model the instruments you already have, including signed SAFEs and side letters? If the valuation workflow is bundled, what happens to your record if you later use a different provider? And what does an employee see when they log in? None of these have a universally right answer — but a vendor either answers them directly or does not, which is itself informative.

Frequently asked questions

Do I need cap table management software?

Not automatically. What you need is a record that reconciles to your documents and a person responsible for it. Software makes that easier once there are enough moving parts that reconciliation by hand is unreliable — many option holders, more than one share class, converting instruments, or repurchases. Before that point, a carefully maintained spreadsheet and a well-organised document folder can be entirely adequate.

When should a startup move off a spreadsheet?

At an event rather than at an age. The usual triggers are a priced round that creates preferred stock and a real stock ledger, an option pool with more holders than one person can track from memory, the first repurchase or secondary sale, employees expecting to see their own holdings, and the first time two people quote different ownership percentages in the same meeting.

How much does cap table software cost?

It depends on the vendor and on your stage, and each vendor publishes its own pricing on its site. Pricing commonly varies with stakeholder count, entity count, and whether a valuation service is bundled. No figures are quoted here because any number would be out of date or wrong for your situation; check the vendors directly and ask what changes the price as you grow.

What is the difference between a cap table and a stock ledger?

The stock ledger is the company record of issuances and transfers of its stock. The cap table is the ownership summary derived from that ledger plus everything else outstanding, such as options and convertible instruments. When the two disagree, the ledger and the underlying documents govern.

Who should own the cap table inside a company?

In practice one named person maintains it — often a finance or operations lead, and at the earliest stage a founder. The board still approves issuances and grants, and company counsel still handles the securities analysis and transfer restrictions. A vendor can hold the record, but responsibility for it does not transfer with it.

What happens if we issued more shares than we authorized?

It is a known category of problem with a known route. Under Delaware law, a defective corporate act or putative stock is not void or voidable solely because of a failure of authorization if it is ratified under DGCL § 204 or validated by the Court of Chancery under § 205. Raising the authorized count is a separate step, made by amending the certificate of incorporation under § 242. Both are formal processes and both are matters for the company’s counsel.

Sources

Delaware General Corporation Law, Title 8, Chapter 1, Subchapter VI (§§ 201–205) — Delaware CodeTransfer of stock, restrictions on transfer, and ratification of defective corporate acts.Checked 11 Aug 2026
Delaware General Corporation Law, Title 8, Chapter 1, Subchapter VIII (§ 242) — Delaware CodeAmendment of the certificate of incorporation, including changes to authorized shares.Checked 11 Aug 2026
Annual Report and Tax Instructions — Delaware Division of CorporationsDue on or before March 1; $50 annual report fee for non-exempt domestic corporations; franchise tax calculated from authorized shares, issued shares and gross assets.Checked 11 Aug 2026
26 U.S.C. § 83 — Property transferred in connection with performance of services — Cornell Legal Information InstituteSection 83(b)(2): the election must be made not later than 30 days after the date of transfer.Checked 11 Aug 2026
17 CFR § 230.701 (Rule 701) — Cornell Legal Information InstituteExemption commonly relied on for compensatory equity grants by non-reporting companies, with disclosure conditions above certain thresholds.Checked 11 Aug 2026
About Form 3921, Exercise of an Incentive Stock Option Under Section 422(b) — Internal Revenue ServiceChecked 11 Aug 2026

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Published: 11 Aug 2026
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