How to Prepare Your Cap Table and ESOP for Australian VC Due Diligence

TL;DR

• Reconcile issued shares, convertible instruments, options and the remaining pool against the company's legal records.
• Confirm option grants have the required approvals and signed documentation.
• Model fully diluted ownership before negotiating a new round.
• Resolve historical discrepancies before investors and lawyers find them.

What investors are checking in the cap table and ESOP

A cap table is only useful when it is supported by the company's actual legal records. Investors want to understand current ownership, future dilution, the available employee pool and whether historical equity grants were handled consistently.

Practical workflow

1. Reconcile shares

Match shareholders and issued securities to the company register.

2. Reconcile convertibles

List every SAFE-style instrument, note or other convertible financing.

3. Audit ESOP grants

Confirm grant date, quantity, vesting, exercise price, approvals and signed documents.

4. Check the pool

Separate granted, exercised, cancelled and remaining options.

5. Model the round

Show how the new financing and any pool increase affect fully diluted ownership.

6. Fix discrepancies

Use qualified legal and tax advisers to resolve historical issues before diligence.

What to prepare

• Current cap table.
• Company share register.
• Convertible financing instruments.
• ESOP rules and grant register.
• Board/shareholder approvals.
• Dilution model for the new round.

Related SendNow resource: fundraising data room checklist.

Common mistakes

• Using a cap table that does not match legal records.
• Counting unsigned or unapproved grants as final.
• Ignoring convertible dilution.
• Increasing the option pool without modeling founder dilution.

External reference: ATO employee share schemes. This article is educational and not legal, tax or financial advice.

See the VDR and Microsite workflow

Frequently asked questions

Why does the ESOP matter to investors?

It affects fully diluted ownership, hiring capacity and the dilution economics of the new round.

What should be reconciled?

Issued shares, convertibles, options, cancellations, exercises, pool size and the legal records supporting them.

Should founders fix discrepancies before fundraising?

Yes. Ownership uncertainty can slow diligence and make term-sheet economics harder to evaluate.

Build a cleaner investor workflow

Use SendNow Microsites to keep deeper investor access organized and auditable.