Who is responsible for maintaining the cap table?
Takeaway: While your company's law firm initially builds and maintains the cap table, the ultimate responsibility for its accuracy rests with the company's leadership, typically the CEO or CFO.
Your capitalization table is the single, authoritative ledger of your company's ownership. Its accuracy is paramount for fundraising, employee equity grants, and corporate governance. A common point of confusion for early-stage founders is understanding who is actually responsible for the day-to-day work of keeping this critical document up to date. The answer evolves as your company grows.
The Early Stage: Your Law Firm
In the earliest days of your company—from incorporation through your first seed financing—the primary custodian of your cap table is almost always your outside legal counsel.
Initial Creation: Your law firm will create the first version of the cap table when they prepare your incorporation documents.
Ongoing Maintenance: They will update it to reflect the issuance of founder stock, the creation of the initial stock option pool, and the issuance of any early SAFEs or convertible notes.
Founder's Responsibility: Even during this stage, the ultimate responsibility for the information on the cap table rests with you. You must provide your lawyers with a clear and accurate record of all equity-related promises and transactions.
The Growth Stage: Bringing it In-House
As your company scales and begins hiring more employees, the day-to-day management of the cap table typically shifts in-house. This usually happens when you hire your first senior finance executive.
The CFO or Head of Finance: Once a CFO or VP of Finance is on board, they will take over the primary ownership of the cap table. They will manage the cap table platform, work with HR to process new option grants, and handle the financial reporting related to stock-based compensation.
A Partnership with Counsel: Your law firm still plays a critical supervisory role. Before any major transaction, like a new financing round or an acquisition, your lawyers will conduct a thorough review and "true-up" of the cap table to ensure its accuracy and to prepare the necessary legal documentation. The relationship evolves into a partnership between your internal finance team and your external legal team.
The Role of a Cap Table Platform
The entire process of maintaining a cap table is made infinitely simpler and more accurate by using a dedicated cap table platform. These platforms act as the single source of truth that all stakeholders—the company, the law firm, and eventually, your investors—can access. They automate the complex calculations and provide a professional, auditable record of all equity transactions, making the question of "who has the latest version?" obsolete.
Ultimately, while the tactical work of updating the cap table is delegated, the fiduciary responsibility for its accuracy always resides with the company's officers and directors.
Disclaimer: This post is for general informational purposes only and does not constitute legal, tax, or financial advice. Reading or relying on this content does not create an attorney–client relationship. Every startup’s situation is unique, and you should consult qualified legal or tax professionals before making decisions that may affect your business.