Cleaning Up Your Cap Table Before a Series B: What Founders Should Fix in 2026 Series B diligence represents a watershed moment for growing companies. Unlike the relationship-driven seed rounds or milestone-focused Series A investments, Series B investors conduct forensic-level reviews of cap table mechanics, equity documentation, and governance structures. The informal arrangements and documentation shortcuts that worked in earlier rounds become expensive negotiation points that can derail deals or dilute founder control. Founders who proactively address cap table hygiene between their Series A and Series B rounds save significant time, legal fees, and use during fundraising. This cleanup process requires understanding how early-stage equity decisions compound through multiple financing rounds and identifying the specific documentation standards that institutional investors expect to see. The stakes are higher in Series B negotiations because the company typically has meaningful revenue, established governance structures, and a broader stakeholder base. Investors at this stage expect institutional-grade documentation and clean ownership structures that can scale through future financing rounds and eventual liquidity events. Converting SAFEs and Notes: Modeling the Impact Simple Agreement for Future Equity (SAFE) instruments and convertible notes from seed rounds create downstream complexity that becomes apparent during Series B preparation. These instruments often convert based on different valuation caps, discount rates, and trigger mechanisms that can produce unexpected dilution patterns when modeled across multiple scenarios. Founders should build comprehensive conversion models that account for all outstanding convertible instruments before entering Series B discussions. These models must factor in how different conversion triggers interact with each other, particularly when instruments have varying seniority levels or conversion mechanics. The goal is understanding exactly how much dilution will occur under different Series B pricing scenarios and whether any conversion terms create adverse incentives for existing stakeholders. Conversion timing also matters significantly. Some SAFE agreements convert immediately upon the next equity financing, while others provide optionality around conversion timing. Understanding these mechanics allows founders to structure Series B terms that minimize unintended dilution effects and avoid situations where early investors receive better conversion terms than the founders anticipated. Documentation cleanup often reveals inconsistencies between SAFE agreements issued at different times or to different investor groups. Resolving these inconsistencies before Series B diligence prevents last-minute negotiations over conversion rights and ensures that all parties understand their ownership positions clearly. Option Pool Strategy and Refresh Timing Employee stock option pool management becomes critical before Series B fundraising because institutional investors expect to see sophisticated equity compensation structures that can attract and retain talent through rapid growth phases. The size and mechanics of the option pool directly impact founder dilution and the company's ability to hire key executives. Option pool refresh decisions should align with the company's hiring plans and growth trajectory rather than responding to immediate recruitment pressures. Series B investors often expect option pools sized to support hiring through the next 18 to 24 months, which requires careful modeling of anticipated headcount growth and competitive compensation benchmarks. The allocation methodology for option grants also requires standardization before institutional diligence. Investors expect to see clear frameworks for determining grant sizes based on role levels, performance metrics, and tenure considerations. Ad hoc option grants or inconsistent allocation practices create compliance risks and complicate ongoing equity management. Vesting schedules and acceleration provisions need consistent application across all option grants. Mixed vesting terms or unclear acceleration triggers create administrative burdens and potential disputes during employee transitions. Standardizing these provisions before Series B fundraising demonstrates operational maturity and reduces future governance complexity. Liquidation Preferences and Anti-Dilution Cleanup Liquidation preference structures from earlier rounds can create unintended consequences when combined with Series B terms, particularly if the company has experienced valuation volatility between financing rounds. Understanding how existing liquidation preferences stack with new Series B preferences is essential for modeling founder returns under different exit scenarios. Anti-dilution provisions from earlier rounds may have triggered adjustments that affect the current cap table structure. Down rounds or stock issuances below prior round