Three Documents That Make or Break Your Seed Round

I have seen a lot of seed rounds. The ones that close cleanly almost always have three things in order before the process starts. The ones that stall or die almost always are missing at least one.

None of these are exotic. None of them are expensive to get right. All of them are the difference between a clean close and a deal that falls apart in diligence.

Document #1: A Clean, Current Cap Table

Your cap table is the single source of truth for who owns what. If it is wrong, incomplete, or out of date, everything downstream breaks. The investor cannot model their ownership. Their counsel cannot verify the numbers. Your pro forma does not work.

This does not mean you need expensive cap table software. A well-maintained spreadsheet is fine at the seed stage. But it needs to reflect every equity issuance, every option grant, every SAFE, every convertible note. And it needs to be backed by actual signed documents.

What a clean cap table includes

Founders' common stock with vesting schedules. All option grants with board approval minutes. Every SAFE and convertible note with conversion terms. Warrants, if any. Advisor equity grants. Anything that could convert into stock needs to be on the table.

If your cap table has not been updated in six months, that is your homework for this week.

Document #2: Signed IP Assignments

Every founder. Every early employee. Every contractor. If someone wrote code, designed the product, or created content the company uses, there needs to be a signed agreement assigning that work to the company. Not a verbal agreement. Not an email. A signed document.

This is the single most common diligence issue I see, and it is the one most likely to delay or kill a deal. The cost of getting this right at formation is a few hundred dollars. The cost of fixing it later, especially if a departed co-founder or contractor needs to sign, is exponentially higher.

The worst case

A co-founder who left early and never assigned their IP. Now you need their signature to clean it up, and they want something for it. I have seen this turn into six-figure settlement conversations at the worst possible moment.

Every person who touches the product gets a signed assignment. Full stop.

Document #3: A Founders' Agreement with Vesting

This covers what happens if a co-founder leaves. What happens to their equity? Do they keep all of it? Does the company have a repurchase right? What about their board seat? What about the IP they worked on?

Investors want to see that equity is subject to vesting. The standard is four-year vesting with a one-year cliff. If you are two years into building the company and your co-founder still has not signed a vesting agreement, that is a problem the investor is going to flag.

What the founders' agreement should cover

Vesting schedule. Departure triggers and what happens to unvested equity. IP assignment. Board composition before and after the round. Decision-making authority on major company decisions. Dispute resolution mechanics if things go sideways.

Nobody wants to talk about a breakup at the beginning of a relationship. I get it. But startups are not marriages. They are business partnerships with real money at stake, and the time to figure out what happens if things do not work is before things start to not work.

The Common Thread

All three of these documents share something in common: they are boring, they are administrative, and they are the difference between a clean close and a deal that falls apart.

Investors are not looking for exciting innovation in your corporate documents. They are looking for the basic blocking and tackling that tells them the company is run by people who pay attention to details.

If you are building a company and planning to raise, get these three in order before you take a single meeting. Your future self will thank you.