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If you are an early-stage founder, you have probably looked at platforms like Carta, Pulley, AngelList Equity, Eqvista, Ledgy, or Shareworks. These cap table management software platforms are genuinely useful, and in many cases essential. But founders sometimes confuse using cap table software with having their cap table properly administered. Those are not the same thing.
Here is an honest look at what these tools do, how they compare, and — more importantly — where all of them stop.
What These Platforms Do Well
Carta remains deeply integrated into much of the venture ecosystem. It is used by more than 50,000 companies, and most top law firms, VCs, and accelerators have existing relationships with the platform, which makes coordination easier. It handles cap table tracking, option grants, 409A valuations, and electronic document signing. If you raise a priced round, there is a good chance your investors will ask whether you are on Carta. For most growth-stage companies, it is the default choice.
Pulley is a strong Carta alternative, particularly for growth-stage companies that want scenario modeling and a cleaner interface. It is generally less expensive than Carta and has a well-earned reputation for responsive customer support. Founders who find Carta's pricing steep or interface overwhelming often prefer Pulley, and it handles most of what early- and growth-stage companies need.
AngelList Equity is well suited for companies doing SPV-based seed rounds and founders who are already in the AngelList ecosystem. Its cap table tools are solid for early-stage companies, though it may not scale as cleanly into later rounds when your investor base and equity structure become more complex. One practical note: AngelList announced it would no longer actively develop its legacy cap table product, so founders currently using AngelList for cap table management should consider migrating to a platform with ongoing development if their equity structure is becoming more complex.
Eqvista, Ledgy, Shareworks, and similar alternatives serve different segments of the market. Eqvista and Ledgy offer lower price points appropriate for pre-seed and early-stage companies. Shareworks (now Morgan Stanley at Work) is more commonly used by later-stage and public companies with complex equity plans. For a company with a simple cap table and no immediate plans to raise, any of the lower-cost options may be worth considering.
We work with founders on all of these platforms. None of them require you to switch to work with us.
Platform Comparison at a Glance
| Feature | Carta | Pulley | AngelList | Eqvista / Ledgy |
|---|---|---|---|---|
| Best stage | Seed through IPO | Early to growth | SPV-heavy seed | Pre-seed / seed |
| 409A support | Yes | Yes | Limited | Limited |
| SAFE modeling | Strong | Strong | Good | Basic |
| Scenario modeling | Good | Excellent | Basic | Basic |
| Investor familiarity | Highest | Growing | Moderate | Lower |
| Relative cost | ~$2,400+/yr | From $1,200/yr | Free / low cost | Free tier |
| Legal advice included? | No | No | No | No |
That last row matters. No platform provides legal advice — and that distinction is more important than most founders realize.
What Cap Table Software Actually Is — and Isn't
Before getting into what these platforms cannot do, it is worth being precise about what they are.
Cap table software is a representation of your legal reality. It is not the source of that reality. Every share issuance, every option grant, every convertible note entry you see in Carta or Pulley exists in the software because someone put it there. The software has no way of knowing whether the underlying legal work was actually done.
Founders routinely enter equity into their cap table software and assume the entry makes it real. It does not. What makes a share issuance or an option grant legally valid is the paperwork behind it — the board consent approving the grant, the stock purchase agreement or option agreement signed by the recipient, the proper corporate authorization. If those documents do not exist, the entry in Carta is a placeholder for something that has not legally happened yet.
Think of it this way: Carta is the ledger. The legal documents are the transactions the ledger is supposed to reflect. If there are no transactions — no signed agreements, no board approvals — then the ledger entry is recording something that does not exist. During financing or acquisition diligence, that gap becomes visible very quickly. And fixing it after the fact is far more expensive than doing it right the first time.
I have seen companies discover years later that option grants were never properly approved by the board, that stock purchase agreements were never signed, or that a SAFE converted in a way that nobody tracked correctly. Those problems do not exist in the software — because the software only knows what someone entered. They surface in diligence, right when you can least afford them.
What Cap Table Software Cannot Do
Every one of these platforms carries the same disclaimer: they are not your lawyer. That matters more than most founders realize. Here is a more complete picture of what software cannot do for you, regardless of which platform you choose:
It cannot tell you whether your equity is legally valid. Software cannot verify that board consents were signed, that agreements were properly executed, or that the correct corporate formalities were followed. It reflects what you entered. It does not audit whether what you entered is accurate or legally supported.
It cannot determine QSBS eligibility. Section 1202 of the Internal Revenue Code offers a federal capital gains exclusion worth $10 million or more (up to $15 million for stock issued after July 4, 2025, or 10 times adjusted basis — the basis at original issuance (at least the FMV of any property contributed, per §1202(i)(1)) — whichever is greater) — but only if your stock qualifies and your cap table has been administered correctly from the beginning. Certain redemptions, improper issuances, and structural errors can quietly disqualify your stock from this treatment. No software flags these issues in real time. Some problems can be fixed; others cannot — especially once discovered during diligence before a financing or acquisition. This is why many founders obtain a QSBS attestation letter — counsel-signed documentation of eligibility prepared before diligence forces the question.
It cannot evaluate 409A defensibility. Section 409A requires the option exercise price to be at least fair market value on the grant date. A qualified independent appraisal within the prior 12 months gives the strongest presumption of reasonableness, but other regulatory safe harbors exist — including the illiquid-startup safe harbor for early-stage companies meeting its conditions. Platforms can track valuations and grant dates, but they cannot tell you whether your 409A process was defensible or whether a particular grant has a tax problem. That requires legal and tax analysis.
It cannot replace board approvals. Every equity grant requires proper board authorization. A cap table entry does not create that authorization — it is supposed to reflect it. If the approval was never obtained, the grant may be void or voidable regardless of what your software shows. A common example: a founder starts entering option grants directly into Carta and sends offer letters to optionees, but the board has never actually approved the grants. The options look real in the software. They are not. Until a valid board consent is in place, no option has been granted — regardless of what Carta shows or what paperwork was sent.
It cannot determine whether SAFEs converted correctly. SAFE conversions involve legal interpretation of the instrument terms, the round structure, and in some cases, state securities law. Software can model conversion math, but it cannot verify that the conversion was legally correct or properly documented.
It cannot analyze state securities law compliance. Rule 701 is an exemption with sales thresholds, not just a cap; crossing the threshold triggers additional disclosure obligations. State blue sky laws add additional layers. Platforms can track issuance amounts, but they rely entirely on the accuracy of the underlying legal analysis — which they are not equipped to provide.
It cannot fix defective issuances. If shares or options were issued without proper authorization, at the wrong price, under a plan that was never properly adopted, or in violation of securities laws, the fix requires legal work — not a software update.
It cannot catch documentation gaps that kill deals. Acquisition due diligence involves a detailed review of every equity grant ever made by your company. We regularly see companies discover missing board approvals, unsigned stock purchase agreements, or defective option grants only after investor diligence begins. Software does not know what it does not have.
The Right Way to Think About It
Cap table software is infrastructure. It is excellent at what it does. Think of it the way you think of accounting software: QuickBooks does not replace your accountant, and Carta does not replace your startup attorney.
The companies that get this right use both. They pick a platform that fits their stage and investor relationships. And they make sure every entry in that platform is backed by actual legal work — signed documents, board approvals, and proper corporate authorization — before anything goes in.
We provide that legal layer. We work alongside whichever platform you use, prepare and review grants before they are made, advise on 83(b) elections and QSBS eligibility, and help make sure every cap table entry reflects something that is legally real — not just something that looks real in a dashboard.
Software helps maintain records. Experienced startup counsel helps ensure the records reflect legally valid equity ownership.
Cap table problems found during financing or acquisition diligence are the most expensive problems to fix — in legal fees, in deal delays, and sometimes in the deal itself. If your company has issued equity and you are not certain the underlying legal work is complete, that is worth a conversation. Schedule a 20-minute call — we can usually identify the gaps quickly. Or learn more about our cap table administration services.
Frequently Asked Questions
Is a cap table a legal document?
A cap table is a record of equity ownership, but it is not itself a legally binding agreement. The legal reality is created by the underlying documents — stock purchase agreements, option grants, board consents, and financing instruments. If those documents are missing or defective, the cap table entry does not fix the problem. It just records something that may not legally exist.
What is the difference between Carta and Pulley?
Both are cap table management platforms, but they serve different stages and priorities. Carta has the largest network of investors and law firms and is generally the default choice for companies raising Series A and beyond. Pulley offers more transparent pricing (starting at $1,200/year), faster 409A turnaround (typically 3–5 days vs. Carta's 10+), and is popular with early-stage founders and Y Combinator companies. Neither platform provides legal advice or verifies that your equity has been properly authorized.
Do I still need a startup attorney if I use Carta or Pulley?
Yes. Cap table software tracks what you enter — it does not verify that the underlying legal work was done. Option grants require board consents. Share issuances require signed agreements and proper corporate authorization. SAFEs require correct conversion analysis. None of these platforms can tell you whether your equity is legally valid, whether you qualify for QSBS treatment, or whether a defective issuance is sitting in your cap table waiting to surface in diligence. That is what startup counsel does.
What happens if options are entered in Carta without a board consent?
The options are not legally granted. A cap table entry does not create an equity grant — it is supposed to reflect one that already legally exists. If no valid board consent was signed before the grant, the options may be void or voidable regardless of what the software shows or what offer letters were sent to employees. This is one of the most common cap table problems we see, and it is far easier to fix before a financing than during one.
When should a startup switch from a spreadsheet to cap table software?
Once you have taken on outside investors, issued SAFEs or convertible notes, or begun granting options to employees, a spreadsheet is no longer adequate. At that point, the complexity of tracking ownership, conversion math, and vesting schedules makes dedicated software worth the cost. For companies at the pre-seed stage with no outside capital and no equity grants, a well-organized spreadsheet may be sufficient — but the moment equity starts moving to people outside the founding team, proper software and legal oversight become important.
