Cap Table Administration for Startups
Your cap table is not a spreadsheet. It is a legal record of who owns your company.
Every equity grant, option award, conversion, and transfer has legal consequences — for your founders, your investors, and your ability to qualify for valuable tax treatment under Section 1202. Errors made early are expensive to fix later, and some cannot be fixed at all.
At Carney Badley Spellman, Joe Wallin provides ongoing cap table counsel to early-stage startups in Washington State and across the country. This is not software support. It is legal guidance from an attorney with more than 25 years of experience in startup equity, tax law, and venture finance.
We Work With All Major Cap Table Platforms
You do not need to change your software to work with us. We provide legal counsel alongside whatever platform your company uses — Carta, Pulley, AngelList Equity, Eqvista, or any other cap table management tool. We know how these platforms work, and we know what they cannot do.
Software tracks your equity. It does not advise you on it.
What Cap Table Administration Actually Requires
Cap table administration — done correctly — requires an attorney who understands:
- 83(b) election requirements. A missed or defective 83(b) election can cost a founder hundreds of thousands of dollars in ordinary income tax. The 30-day deadline is absolute.
- QSBS eligibility under Section 1202. Cap table errors — including improper redemptions, incorrect issuances, or failure to meet the active business requirement — can silently disqualify your stock from the federal capital gains exclusion worth up to $10 million or more.
- Vesting schedules and acceleration provisions. Poorly drafted or incorrectly administered vesting creates disputes at acquisition and departure.
- Option plan compliance under Rule 701 and Section 409A. Granting options without a current 409A valuation or outside the limits of Rule 701 creates SEC exposure and tax problems that surface at the worst possible time — during due diligence.
- Equity issuance documentation. Every grant requires a written agreement, board approval, and accurate records. Defective or missing documentation is one of the most common deal-killers in acquisitions.
What Can Go Wrong
The most expensive cap table mistakes share a common trait: they were invisible until the moment they mattered most.
- A founder misses the 83(b) election deadline and faces six figures in ordinary income tax on vesting events.
- An early redemption disqualifies the company's stock from Section 1202 treatment, costing investors millions in capital gains exclusion.
- Option grants made without a 409A valuation expose the company and employees to IRS penalties under Section 409A.
- A cap table with undocumented transfers or missing board approvals delays — or kills — an acquisition.
These are not hypothetical. They happen regularly to well-intentioned founders who assumed their software platform was handling the legal side.
About Joe Wallin
Joe Wallin is a corporate and tax attorney at Carney Badley Spellman, P.S. in Seattle, Washington, with more than 25 years of experience advising founders, angel investors, and early-stage companies. He holds an LL.M. in Taxation from New York University School of Law, chairs the Legal Advisory Committee of the Angel Capital Association, and co-authored Angel Investing: Start to Finish, published by Holloway. He has advised hundreds of startups on equity structure, cap table administration, QSBS planning, and venture finance.
Schedule a Consultation
If you are forming a company, raising a seed round, or concerned about the legal integrity of your existing cap table, schedule a call to discuss whether ongoing cap table counsel makes sense for your situation.
Joe Wallin is an attorney at Carney Badley Spellman, P.S., in Seattle, Washington. This page is for informational purposes only and does not constitute legal advice. Contact Joe directly to discuss your specific situation.
