Resolving Unwritten Early Code Contributions During Separation
Early unwritten software contributions leave statutory copyright with individual authors, forcing companies to secure written assignments or execute code rewrites.
cap table resolution
Meaning
Reconciliations of corporate share registers eliminate discrepancies between legal ownership claims and recorded equity distributions. Performing cap table resolution provides investors with a definitive audit of equity ownership across all share classes. The process audits founder grants, option pools, and convertible notes to yield a single official record.
Applicability ceases once all share ownership records match filed state incorporation certificates and executed agreements.
Shareholder Alignment
Inconsistent stock records create friction between founders and institutional investors. Achieving cap table resolution prevents conflicts during financing rounds by verifying individual grant histories. Discrepancies often emerge from unrecorded advisor options or miscalculated anti-dilution clauses.
Formalizing ownership structure restores investor confidence before capital transfers.
Verification Protocol
Auditing historical stock issuances requires examining stock purchase agreements, board consents, and payment confirmations. During cap table resolution, legal counsel traces every stock certificate from original corporate formation to the current capitalization date. Paper certificates are checked against digital capitalization ledgers for numerical consistency.
Missing signature pages must be secured before final closing binder creation. Historical tax filings, including section 83b elections, are reconciled against equity vesting dates to ensure tax reporting alignment.
Dilution Record
Precise ownership tracking protects existing stakeholders from unintended equity reduction. Completing cap table resolution establishes clear percentages for pro-rata rights. Documented equity allocation ensures transparent governance during acquisition negotiations.
Resolving Indefinite Equity Promises Across Multiple Early Venture Tiers
Indefinite equity promises across venture tiers are resolved by auditing dated contemporaneous records to convert verbal commitments into formal stock agreements.