Carta or Pulley: Picking a Cap Table Tool by Startup Stage

Before you've hired anyone beyond the founders, a shared spreadsheet with signed documents filed next to it is genuinely fine. The moment a tool starts earning its cost is your first priced round or your first employee option grant, because that's when a math mistake in a SAFE conversion or an unsigned stock purchase agreement turns into a real legal problem.

Pulley emphasizes exactly this moment: model how a new SAFE or priced round dilutes each founder before anyone signs anything, and order a 409A valuation without a long back-and-forth, though you should confirm current turnaround with the vendor. For a two- or three-person founding team raising a first round, that turnaround matters more than the reporting depth a bigger company would want.

Somewhere around your seed or Series A term sheet, an investor will ask you to carve out an option pool before the round prices, which dilutes existing shareholders, not the incoming investor. Say your investor asks for a pool sized to cover two years of planned hiring; you need to see, in one screen, how that pool size changes your own ownership versus a smaller pool that gets topped up later.

This is where a scenario model earns its keep: run the pool size next to your hiring plan and your next-round assumptions before you agree to a number, not after. Both tools model this, but the conversation usually happens under time pressure, so whichever one you're already living in day to day is the one you'll actually use in the room.

By the time you're closing a priced round with an institutional lead, your cap table stops being just your document and becomes something their counsel, their fund administrator, and eventually their LPs will all touch. Carta built its later-stage product around that audience: a cap table format institutional investors already recognize, plus compensation benchmarking and secondary tender offer support once employees start asking about liquidity.

Median ARR growth for private B2B SaaS companies runs around 25%¹. A company posting numbers anywhere near that is exactly the kind of company where investors start asking pointed questions if the cap table has three different spreadsheet versions floating around instead of one system of record.

Once you're competing for senior engineering talent, candidates comparing a lower-cash, higher-equity offer against a market-rate cash offer will do that math themselves, so you should do it first. Median pay for a software developer is $135,980 a year, climbing to $171,980 at the 75th percentile², and a grant that looks generous as a raw share count can look thin once a candidate converts it to an annual dollar figure at your current valuation.

A cap table tool that shows grant value in dollars, not just shares, lets your hiring manager have that conversation honestly instead of hand-waving toward 'meaningful equity.'

Don't run two systems in parallel longer than a single closing. Pick a tool at the point your hiring or fundraising pace makes manual tracking risky, migrate every existing grant and its signed paperwork in one pass, and retire the spreadsheet the same week. Keep board consents, stock purchase agreements, and any 83(b) election confirmations attached to the record, not filed separately, so the next person who opens the cap table during diligence isn't hunting through your email for a signature.

If the reason you're avoiding a priced round is dilution itself, see venture debt versus equity for B2B SaaS before you assume a cap table tool is the only decision to make this quarter.

Follow this order when you move off the spreadsheet:

1. Pick a tool at the point your hiring or fundraising pace makes manual tracking risky, rather than migrating early.
2. Migrate every existing grant and its signed paperwork in one pass, so no record ends up living in two systems.
3. Retire the spreadsheet the same week, and don't run two systems in parallel longer than a single closing.
4. Attach board consents, stock purchase agreements, and 83(b) election confirmations to the record instead of filing them separately.

The most common mistake isn't picking the wrong tool, it's treating the option pool as free. An unallocated pool comes out of existing shareholders' ownership before a new investor's money is counted, so every percentage point set aside for future hires is a percentage point founders and earlier employees no longer hold. Model the pool against your actual 18-month hiring plan instead of accepting whatever number a term sheet proposes first.

The second mistake is granting options and then losing track of exercise deadlines. Most option grants expire ninety days after someone leaves unless the board extends that window, and a former employee who misses it loses equity they earned. Both tools can flag approaching deadlines automatically, but only if someone is actually watching the dashboard.