Founders, read this before you give away another 1%

At a recent Vancouver Tech Journal panel hosted with Fasken, a group of startup veterans got candid about a topic that rarely gets the spotlight—but can quietly ruin your company’s future: the cap table.

Joining the conversation were Lisa Payne (CFO and COO at Inetco), Hans Knapp (co-founder and partner at Yaletown Partners), and Geoff Pedlow (partner at Fasken). Each brought hard-won insights from across the startup lifecycle—seed rounds, Series As, exits, and everything in between.

Here’s what they had to say, and why every founder needs to treat their cap table like a core part of the business—not just a spreadsheet you check before fundraising.

A messy cap table will lose you money, fast

Payne has passed on startups simply because their cap tables were too chaotic. When she joined INETCO, she had to lead a full recapitalization before they could raise a cent. “Different share classes, alphabet soup, weird terms from prior rounds. We had to clean everything up before going out to investors,” she said. “You can’t explain your way out of a messy cap table. You have to fix it.”

Real talk: If you can’t clearly show who owns what and why, you’re not ready to raise money.

Google Sheets aren’t good enough anymore

Pedlow, a startup lawyer with Fasken, has seen some “art project” cap tables in his day—but the real issue isn’t design. “I’ve seen founders who think they’ve issued shares… but there’s no paperwork. No subscription agreements. No vesting terms. Nothing.”

Do this instead: Use real tools (like Walter or Pulley), get proper legal docs in place, and avoid handshake deals—even in the early days.

Don’t give away your company before you’ve built it

Founders often hand out equity early on—advisors, friends, landlords, whoever helped them out. But that generosity can backfire. Knapp put it like this: “When we evaluate cap tables, we look at what the company gave up—and what it got in return. Too often, a big chunk of the company has gone to people who aren’t around anymore.”

Ask yourself: Are the people on your cap table still adding value? If not, you’ve got a problem.

Equity is a tool for retention—not a thank-you gift

Payne emphasized the need to align your equity plan with the people who are building your business today—not the people who were around three years ago. “There’s nothing more disappointing than a key employee sticking around for 10 years… and walking away from an exit with almost nothing.”

Be thoughtful: Make sure your employee option pool is big enough to matter—and that equity is actually helping you retain talent.

Founder breakups happen all the time—plan for it

“More often than not, founders split up,” said Payne. “And most of them haven’t planned for it.”

Without vesting, shareholder agreements, or basic legal protections, you could end up handing a big chunk of your exit to someone who’s been gone for years.

Pro tip: Set up vesting from the beginning. Think of it as a prenup for your startup.

Not all shares are created equal

Cap tables are just the beginning. The real action happens in the waterfall—who gets paid first, and how much. Preferred shares, liquidation preferences, and early investor terms can drastically change who benefits from a successful exit.

Understand the details: It’s not just about how much you own—it’s what kind of shares you own and what rights they carry.

Capital-efficient companies win more often than you think

“Companies that reach profitability early or raise less money usually come out ahead,” said Knapp. “They’ve preserved more ownership. They’ve avoided bad terms. And their cap tables are cleaner.”

Fundraising tip: Don’t raise money just because you can. Raise it when you need it—and when you can clearly show what it’s for.

SAFE notes aren’t always “safe”

SAFEs (Simple Agreements for Future Equity) are popular—but they come with risks. “They kick hard conversations down the road,” said Knapp. “If you do multiple SAFE rounds without clarity, you end up with massive dilution and lots of confused investors.”

If you’re using SAFEs: Make sure you understand when and how they convert—and don’t wait too long to clean them up.

TL;DR: Your cap table isn’t just paperwork—it’s strategy.

A clean, well-structured cap table isn’t just for VCs or lawyers. It reflects how your company makes decisions, rewards people, and creates long-term value. “You can’t have a good outcome without good planning,” said Knapp. “And a clean cap table is the result of that planning.”