Cap-table health signals

On the company overview

The overview you land on after signing in has an Equity health tile that reads Healthy, Needs attention or At risk. Beside it, the Needs attention card lists every signal that is not passing, each linking to where you fix it, plus to-dos that do not affect the grade: attach a missing plan document, tie an option plan to its share class, retire treasury shares after a buy-back, and void a valuation recorded twice. The card shows four items; the rest are counted below them.

Where each signal lives

Each signal is computed from your live records.

Outstanding SAFEs or notes are noted, not graded: the round pro forma under Model shows a banner counting them, so you can model their conversion before a priced round.

The 409A status dot

A small colored dot sits beside the fair-market-value tile at the top of the cap table. Green means a current 409A is on record; amber means it expires soon, so line up a refresh; red means there’s no current 409A, so option strikes can’t be safely set until you record one. The dot links to the 409A page to fix it.

The five signals

• Current 409A valuation - flags when there’s no active 409A or it has expired, and warns within 30 days of expiry. You can’t safely price option strikes without one.
• Valuation coverage on grants - flags any option grant with no valuation of any kind on record at its grant date, and warns when a grant was priced under a 409A that has since been superseded. A grant priced by an early board resolution - common before a company needs a formal 409A - counts as covered; it carries no 409A safe-harbour protection, which the 409A page calls out separately. The score counts only outstanding grants. The 409A page also lists exercised grants, and cancelled or lapsed grants that had an exercise, so this signal shows both numbers, for example “27 grants were priced with no valuation on record at the grant date (8 still outstanding)”.
• 83(b) elections - flags any election past its filing deadline (30 days, moved to the next business day when day 30 falls on a weekend or legal holiday) and still unfiled, and warns when one is due soon. A missed window cannot be reopened, so this signal is weighted heavily.
• Signed grants - warns when outstanding grants haven’t been signed yet.
• Board-approved grants - warns when outstanding option grants aren’t backed by a recorded board approval.

A plan listed as a person

Some exports put a line for a plan’s unissued shares in the same column as the holders, for example 2020 Equity Incentive Plan Available. An older version of our Pulley import read that line as a person. If your stakeholder list has a row named for one of your option plans that holds nothing, the overview shows a sixth signal, A plan is listed as a person, as a warning. That row is left out of the holder pickers, so nobody grants it options by mistake, but it stays on the Stakeholders page until you remove it. To remove it, open its stakeholder page and choose Edit name or remove, or ask your assistant to delete it. A re-import does not remove it for you: an import never deletes a stakeholder, so it adds a card to your import findings instead.

How the grade is worked out

Each signal passes (full credit), warns (half credit) or fails (none). The current 409A and the 83(b) signals carry a weight of 3; the other three carry 2. The score is the weighted share of credit earned, out of 100: 90 or more is an A, 75 a B, 60 a C, and anything lower a D. A and B read Healthy, C reads Needs attention, and D reads At risk. The signed-grant and board-approval signals can only warn, never fail. The plan-listed-as-person signal appears only when there is one, with a weight of 1, and can only warn.

Getting nudged

If the grade slips (say B to C), Tenacap can email you so you can see what changed, and the monthly digest recaps the current grade. Clear the list before you raise or hand over a diligence pack.