Cap-table basics every first-time founder should know
You don't need to be a CFO but you must understand these five ideas before you sign your first term sheet.
1. Authorised vs paid-up capital
Authorised is the ceiling. Paid-up is what's actually issued. Start with a reasonable authorised (e.g., ₹10L) so you don't need MCA amendments every round.
2. Founder vesting
Even if there's just you and a co-founder set up a 4-year vesting with a 1-year cliff. It protects the surviving founder if one leaves early.
3. ESOP pool
Reserve 8–12% for employees before your seed round. VCs almost always insist on it, and it's better to dilute yourself pre-round than watch your stake shrink mid-negotiation.
4. Convertible instruments
Understand CCPS and SAFE-equivalent instruments. Get comfortable with valuation cap and discount before your first investor call.
5. Keep it updated
Every share issuance, ESOP grant and transfer updates your cap table. A messy cap table has killed more good deals than bad ideas.
Talk first.
Decide with clarity.
Before choosing only on price, speak with someone who understands what First-Time Founders truly need.