A REAL EXAMPLE, IN TWO PARTS
We will not name this customer. They are a web3 company, they run a complicated cap table, and their story is the clearest explanation we have of what Sprout actually does, and why we built it this way.
It comes in two parts. What they needed at the start. And the series of questions and support they needed afterwards.
PART ONE: WHAT THEY NEEDED
When this customer signed up, they did not need a login. They needed an answer.
The scenario they asked us to model had a lot stacked on top of itself. SAFEs at several different valuation caps, all converting at the same moment. An equity round on top. Then another holder arriving afterwards through warrants.
None of that is exotic on its own. Together, in sequence, it is the kind of thing that quietly beats a spreadsheet. It beats a lot of software too.
The warrant is the hard part, and it is worth understanding why. A funding round calculator runs on one rule: price per share equals pre-money valuation divided by existing shares, and everyone in the round pays that price. A warrant does not follow that rule. It is a right to buy shares at a price fixed earlier. When the holder exercises, the company receives that old strike, not today’s price. Ownership is set by the share count. Cash is set by an old number.
Model a warrant holder as an ordinary investor and one of two things happens. Either the percentages are right and the cash is fiction, or the cash is right and the valuation is nonsense. No combination of inputs makes both true.
We modelled the full sequence, every stage through to exercise, and sent it back in forty minutes. The founder had run their own analysis in parallel and confirmed it matched. That is exactly how this should work. They were not outsourcing their thinking. They were checking it, against people who do this every day.
That only works because everything had been onboarded properly in the first place: every SAFE, every note, every grant, loaded the right way, with the conversions understood. A cap table is not plug-and-play. It works if, and only if, the setup is right.
PART TWO: THE QUESTIONS THAT FOLLOWED
Here is what most cap table marketing never mentions. Signing up is not the end of the work. For this customer, it was the start of a series of questions.
First, a check of their own model. Their core numbers were sound. But one scenario input, sitting at zero and never used, was wired in a way that would have produced a cap table totalling more than 100 percent the first time anyone touched it. Nothing errored. Nothing turned red. The file looked clean. The trap was latent, waiting for the next round, which in practice means it would have surfaced mid-negotiation. That is how equity spreadsheets actually fail: not on arithmetic, which gets caught, but on assumptions sitting in cells nobody has used yet.
Then came a live financing, with real documents. A term sheet. Proposed changes to the share structure. A milestone warrant. Their questions to us were the right ones. How do the new preference shares and the warrant actually show up in the share register and the fully diluted cap table? What are the before-and-after ownership numbers? Do the cap table numbers in our documents add up? And can we trust the summary our AI tool produced of the next steps?
Our answers come with a clear boundary, and we state it up front. We advise on the cap table: the register, the fully diluted numbers, before-and-after scenarios, option pool sizing and who each choice dilutes, and whether the numbers in the documents are internally consistent. We give practical, strategic and operational guidance. We do not give legal, tax or regulatory advice. The exact rights in a warrant or a term sheet, and any changes to a company’s constitution, are for their counsel and corporate services provider, and we flag where that applies. An AI summary is a checklist to test, not advice to follow.
Each of those requests was small on its own. Together they added up. This customer used up all of the managed service credits that came with their plan.
Then they bought more credits, so the work could continue without stopping and starting.
We think that is the most honest review managed services can get. Nobody buys more of a service they did not value.
WHAT THIS TELLS YOU
Two lessons, and they are the whole Sprout argument.
One, the software is the easy part. What this customer needed, at the start and then again and again afterwards, was people who would read the actual documents, model the actual structure, actively manage the data, and say plainly when an expected answer was wrong. Software on its own is throwing founders into the deep end of the pool without a life preserver. SaaS works for simple things. Equity management is not one of them.
Two, look at the market. At one end you have cheap: the big-name, popular providers, free or cheap software, no services, and you are on your own. At the other end you have expensive: serious money for platforms and advisers, and it still does not solve the real problem. At neither end does anyone provide consulting and active data management together.
Sprout sits in the middle, just right. We do the full onboarding, so you get a clean cap table. Once you are on, a simple conversion model is built into the platform, pre-money SAFEs included, so you can run scenarios yourself. And when the questions get real, as they did for this customer, the managed service is there, and apparently worth buying twice.
And yes, we use AI, smartly. It is the cherry on top, not the product. Bad questions get bad answers, and it takes a team like ours to keep hallucinations and slop out of a cap table.
Call us the Goldilocks of cap table management.
ONE NECESSARY CAVEAT
Modelling is not legal or tax advice and we do not pretend otherwise. A model tells you what the numbers do. It does not tell you whether your articles permit the allotment, whether pre-emptive rights need waiving, what your filing deadlines are, or how a grant gets characterised for tax. Those are questions for your lawyers, and we will tell you to go ask them.
What we will do is make sure that by the time you walk into that conversation, you know exactly what you are looking at.