5 Cap Table Mistakes Indian Founders Make — And How to Fix Them
Cap tables are one of the few founder decisions that are hard to undo. Get them right early and you buy yourself years of optionality.
Key takeaways
- —Uneven co-founder splits without vesting are the top reason seed rounds fall apart in diligence.
- —Create a 10–12% ESOP pool at seed, not at Series A.
- —Pool small angel cheques into a syndicate or SPV to keep the cap table clean.
- —Never grant silent advisor equity without scope, term, and vesting.
1. Uneven co-founder splits with no vesting
A 70/30 split with no vesting is the single most common reason seed rounds fall apart in diligence. Default to near-equal splits with a 4-year vest and 1-year cliff, and revisit only with real reason.
2. Skipping the ESOP pool until Series A
Create a 10–12% ESOP pool at seed. If you wait until Series A, the pool comes entirely out of the pre-money — meaning founders and existing investors take all the dilution.
3. Too many small angels on the primary cap table
Twenty angels each holding 0.3% creates a signing nightmare at Series A. Pool small cheques into a syndicate or SPV wherever possible.
4. Non-standard SAFE or CCPS terms
Exotic discount structures, multiple valuation caps, and full-ratchet anti-dilution clauses will spook every institutional investor. Stick to market-standard instruments.
5. Silent advisor equity
Never grant advisor equity without a clear scope, term, and vesting schedule. 'Advisor' should mean something, or it means nothing to your next investor.
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