🚨 The Cap Table Trap🚨

As Q1 wraps up, founders are aligning with investors on funding strategies but many overlook how their cap table decisions can kill future liquidity.

A poorly structured cap table doesn’t just make fundraising harder. It limits secondary sales, complicates exits, and weakens founder incentives.

But how exactly can your cap table hurt your liquidity? In short, a liquidity planning trap.

1. Too many small investors make negotiating exits a nightmare. A scattered ownership structure leads to delays and deadlocks when it’s time to sell.

2. Dead equity from ex-founders or inactive shareholders means valuable ownership isn’t aligned with the people driving growth. When an exit deal requires unanimous investor approval or complex ownership restructuring, it slows things down, sometimes killing deals outright.

3. Over-diluted founders face motivation issues. If you only own 5-10% by Series C, VCs may hesitate to back you, fearing misalignment.

Now, how do you keep your liquidity options open?

✅ Plan for secondary sales early, don't assume liquidity will just happen.
✅ Keep your cap table lean, too many investors create legal roadblocks.
✅ Use vesting & clawback clauses, ensure only active contributors hold equity.
✅ Model dilution impact, track how much ownership you’ll have post-Series B/C.

The signal here is clear: African founders must be more intentional about dilution.

Unchecked dilution doesn’t just reduce your stake, it limits liquidity options, complicates future fundraising, and creates roadblocks for a smooth exit.

Are you actively planning for cap table risk and long-term liquidity?