Incorporate Without Losing Cap Table Control
Use a formation vendor for routine paperwork, but keep founder agreements, tax elections, cap table, and investor documents with your own lawyer.
You are at the kitchen table, laptop open, founder agreements in one tab and a formation vendor in another. Stripe bought Clerky, and the transaction terms were not made public. Clerky had raised a known $6.1 million, had Y Combinator backing, and had co-founder Darby Wong as CEO.
The vendor can file the company quickly. The question is who holds the ownership record once the company exists and before you sign founder agreements. A fast filing is useful. A filing that hides the ownership file should make you pause before you pay.
Clerky's startup clients represented 23% of all Silicon Valley seed and pre-seed financings, and those companies had raised more than $140 billion in aggregate venture capital. Startup formation on Clerky's platform grew 6.5 times faster in the previous year than its historical average.
Clerky said it would keep the same team and mission under Stripe, focusing on safe routine legal paperwork for high-growth startups and their attorneys. Stripe introduced Atlas in 2016 as a formation product covering Delaware incorporation, EIN setup, founder equity, 83(b) elections, SAFE creation, and connection to banking and Stripe payments. More than 100,000 founders had used Atlas.
Put the boring filing with the vendor
A formation vendor is useful when the task is narrow, repeatable, and low-risk. The routine steps should be boring: the state filing, the tax ID, the bank account, the payment connection. The vendor can move quickly, but you should still know what was filed and where the file lives.
A good vendor should give you a clear file, a clear timeline, and a clear record of what was submitted. Request the filing receipt, the tax ID, and the final template in a shared folder you control. Do not accept a dashboard as the document, and do not accept a screen as the file.
Before you pay, confirm what is included and what is not. Confirm who prepares the founder documents, who files the tax election, and who keeps the final versions. If the platform wants to keep the cap table in its system, request the source file before you pay.
Keep the ownership record with your lawyer
The cap table is the map of who owns what. When the vendor holds the only copy, you lose easy access to the record. Founder agreements and investor documents should be reviewed by a lawyer who answers to you, not to the platform.
Your lawyer should explain the founder agreement in plain language and check the investor documents before you send them. The vendor can prepare a draft. The lawyer should decide whether the draft is safe. Keep the cap table in a file you control, showing who owns what, what is reserved for future investors, and what has already been issued. If you cannot export it, ask for the export before you sign.
Use this split before you sign
Run the checklist before you sign founder agreements or raise a pre-seed round. Keep the split simple and export the files you need. The vendor side should be boring. The independent side should be yours.
- Vendor-safe: Delaware filing: confirm the filing is complete.
- Vendor-safe: EIN setup: confirm the tax ID is issued.
- Vendor-safe: SAFE template: confirm the template matches your round.
- Vendor-safe: banking connection: confirm the account is linked to the company.
- Keep independent: founder agreement: confirm your lawyer reviewed it.
- Keep independent: 83(b) filing: confirm the tax election was filed on time.
- Keep independent: cap table: confirm you have the source file.
- Keep independent: attorney review: confirm a lawyer signed off.
- Keep independent: investor documents: confirm final versions are in your data room.
When a vendor asks to be the only record of ownership, stop and ask for the source file. Generated templates still need lawyer review of the final terms. Filed elections belong in your own data room.