What's the most common diligence red flag?

Equity issued without documented board approval, and options priced off a stale or missing 409A. Both are quiet — nothing looks wrong until someone reconciles the cap table against the documents that are supposed to back it.

Can I fix these before raising?

Most, yes — a missed board approval can be ratified, a missing agreement can be signed, an orphan SAFE can be reconciled. The exception is the 83(b) window, which cannot be reopened. The point of checking early is that you have time to fix what's fixable.

How does the scan find them?

It reads your documents, classifies each one, and reconciles what your cap table claims against what your documents actually prove — then names the gaps. No cap-table entry should exist without a document behind it, and vice versa.

The red flags a document scan catches before your investor does

Diligence is not where you want to discover your own problems. By then a term sheet is on the table, a clock is running, and every defect becomes a negotiating lever for the other side or a reason to slip the timeline. The founders who raise smoothly aren’t the ones with perfect paperwork — they’re the ones who found their own gaps early, while there was still time to fix them. Here’s what an investor’s counsel is actually looking for, and what a scan of your own documents surfaces first.

Equity that nobody approved

Every share and option a Delaware corporation issues has to be authorized by the board at the time of the grant (8 Del. C. §157(b)). In the rush of early hiring, grants get promised in Slack, offer letters go out, and the board consent that’s supposed to authorize them never gets papered. On the cap table it looks fine. In diligence it’s a grant that doesn’t cleanly exist — and a reconciliation that reads the cap table says 40,000 options; there’s no board approval behind them is a red flag every time. More on grant approvals →

The 83(b) that never got filed

A founder or early employee bought restricted stock, and nobody filed the 83(b) election inside the 30-day window (Treas. Reg. §1.83-2(b)). This one can’t be fixed — but it absolutely gets asked about, and the honest answer changes the tax picture for that person materially. Better to know which of your people are exposed than to learn it under questioning. More on the 83(b) window →

SAFEs and notes with no home

A company raises on SAFEs across a year, and by the time it’s raising a priced round, the set of executed SAFEs no longer matches the set of investors on the cap table. An investor line with no signed SAFE behind it, or a signed SAFE with no cap-table line, is an orphan — and orphans are exactly what a tie-out reconciliation is built to surface. How a cap table ties out →

Options priced off a stale 409A

The safe-harbor presumption that your strike price is fair market value runs 12 months (Treas. Reg. §1.409A-1(b)(5)(iv)(B)). Grant on an expired 409A — or after a priced round that reset your value — and you’ve handed every optionee a latent tax problem, and diligence a clean finding. More on 409A refreshes →

Missing IP assignments

The engineer who built your core product as a contractor, with no signed IP assignment, may still own a piece of what you’re selling. It’s one of the first things acquirers and lead investors check, and one of the easiest to miss when you’re moving fast.

Find yours first

None of this requires a lawyer to find. It requires reconciling your documents against your cap table — which is exactly what the free scan does. Drop your documents in, and it tells you what’s on file, what’s missing, and which of these red flags are sitting in your own room right now. What you do with the list is up to you; the point is to hold it before an investor does.