Fundraising Operations
Equity Diligence: Prepare an Exceptions Register for Advisers
An equity diligence pack needs more than a folder of agreements.
What you will learn
- Distinguish a document request from an unresolved exception.
- Build an evidence-backed issue register.
- Close a case only after the source and downstream records agree.
An equity diligence pack needs more than a folder of agreements. It needs a clear account of what does not yet reconcile. An exceptions register gives each discrepancy a source, a practical consequence, an accountable reviewer and a closure test.
Start where the general checklist ends
The existing cap-table review checklist identifies records to inspect. This lesson addresses the next job: handling an actual mismatch without disguising it as a completed correction. A clean export is not evidence that a disputed award or transaction is valid.
Sumo Logic’s 2010 stock plan, amended in 2020 and filed with the SEC illustrates how award agreements and plan terms sit in a larger document set. It is a historical reading example, not authority to resolve another company’s rights. Where the issue concerns approval, entitlement or tax treatment, the register should route the question rather than supply a legal conclusion.
Fictional exceptions register
| Case | Observed conflict | Evidence and owner | Closure test |
|---|---|---|---|
| E 01: quantity | Export shows 12,000 options; signed notice shows 10,000 | Dated export and notice; equity administrator | Written explanation, authorized correction and matching reread |
| E 02: service start | Two records show different commencement dates | Approved award packet; responsible company reviewer | Confirmed source and downstream calendar agree |
| E 03: missing record | Exercise appears in statement but no matching transaction evidence is located | Statement and request log; administrator | Requested evidence located or issue explicitly remains open |
Work one exception through to closure
For E 01, do not change the export to 10,000 merely because the signed notice looks persuasive. The administrator may locate an approved amendment adding 2,000. Alternatively, the export may be wrong. Preserve both observations, ask for the missing link and keep the case open until the responsible team explains the difference.
If the team confirms an export error, save the correction receipt and obtain a new dated export. Compare the holder, instrument, quantity, relevant schedule and totals. A “fixed” email without a confirming reread is a progress update, not a completed reconciliation.
Prioritize by consequence, not visual tidiness
- Does the issue affect a near-term review or an external disclosure?
- Could the same mismatch affect more than one record?
- Is the source missing, ambiguous or simply not yet reviewed?
- Who has authority to confirm the interpretation and authorize a correction?
- Which related documents or calculations will need a second check?
Do not invent a legal materiality threshold. Use a practical triage label such as “blocks this packet,” “needs clarification” or “format-only,” and state what the label means. A formatting issue becomes substantive if it changes the instrument or unit being reported.
Share an honest diligence handoff
A useful summary says which cases are open, what evidence has been requested and what cannot yet be relied on. Keep sensitive holder details restricted to the people doing the review. Connect the questions to the investor-FAQ framework rather than claiming there are no issues. Finta can keep the related adviser conversations and next actions organized; it does not decide legal entitlement or certify the equity record.
About this lesson. By Finta Editorial Team. Sources checked November 14,2026. Examples and exercise amounts are fictional. General education, not individualized legal, tax, accounting or investment advice. Confirm actual terms with the responsible company team and qualified advisers.