Startups
Founders obsess over the cap table and ignore the entity holding it
By Tzvi "LLC" Weiser·
Founders can recite their cap table from memory. Ask them what entity actually owns the company’s intellectual property and you often get a pause. That gap is where financings slow down and valuations quietly take a haircut.
The structure underneath a startup is not paperwork. It decides where the IP lives, who can sign, how founders vest, and whether an investor can wire money without a month of cleanup first.
The cleanup tax
Most early structure problems are fixable. They are just expensive to fix late, under deadline, with a term sheet on the table. Assignments that should have happened on day one, an entity formed in the wrong state, founder shares with no vesting. None of it is fatal early. All of it is friction later.
Get the entity right before you raise, not during. The version of you negotiating a round will thank the version of you that set it up clean.
- LLay the entity down before you raise.
- LLock the IP where investors expect it.
- CClean it up before diligence does.
Tzvi "LLC"