Managing equity used to be treated simply as an administrative task — important, but tucked away in spreadsheets and legal files. That’s no longer the case. For today’s CFOs, equity management has become a visible marker of leadership maturity, investor readiness, and the overall company health.
This shift was at the heart of the CFO Leadership Council’s recent webinar Audit. Exit. Fundraise. Is Your Equity Management Strategy Ready?, sponsored by Fidelity Private Shares. The conversation featured:
- Kristen Craft, Vice President, Business Partner Manager, Fidelity Private Shares
- Michelle Hipwood, CFO & Co-Founder, EnFi
- Matt Derda, Director, Private Market Product Marketer, Fidelity Private Shares
Together, the panelists explored how trust, accuracy, and scalability in startup equity management can give every finance leader, regardless of stage, an edge in today’s market.
How to Build Trust as a Finance Leader
Equity management isn’t just about compliance, it’s about trust. When investors and boards review your cap table, they’re doing more than checking numbers, they’re assessing whether leadership is disciplined and reliable.
As Kristen Craft put it:
“The process is the proof. The way that you manage your equity speaks volumes about the kind of CFO you are.”
That proof goes beyond face value. A clean, well-documented cap table shows that a leadership team can scale responsibly, communicate clearly with stakeholders, and anticipate the needs of auditors and investors. Conversely, a messy or outdated record raises red flags. If ownership records are sloppy, what else might be overlooked in the company’s financials?
Breakdowns between equity records and the underlying legal documents don’t just create paperwork headaches, they call leadership into question. For many investors and boards, equity management is the first test of whether a CFO can balance precision with scale.
In today’s market, where capital is cautious and diligence is more rigorous, these signals matter more than ever. A messy process suggests disorganization. A clean, consistent equity management system helps build confidence that the company can scale responsibly.
>> For more on how investors evaluate records, see our guide on what to expect during due diligence.
Don’t Wait Until It’s Too Late: Accuracy Builds Scalability
Spreadsheets might work when there are two founders and one angel investor, but they don’t scale. Every new hire, grant, or financing round adds complexity, and with complexity, comes risk. A single typo or “fat-finger” entry can ripple into legal disputes or, worse, derail a financing round.
Michelle Hipwood, CFO & Co-Founder of EnFi, shared how even a small slip can snowball:
“Just anecdotally, I had one situation many years ago… there was a fat-finger error on an equity grant that was then not matched up with a spreadsheet. [With spreadsheets] you lose version control which begets errors… the last thing anybody wants is something to go sideways because your cap table isn’t organized and tied to legal docs.”
The hidden cost isn’t just legal cleanup, it’s momentum. In today’s market, investors expect clean, reconciled ownership records during fundraising due diligence. If a CFO is forced to spend weeks correcting records under pressure, the deal itself can stall or collapse.
Kristen drove home the point:
“The best time to plant a tree was 30 years ago. The second best time is today. And I think there’s something kind of similar here… the best time to make sure that everything is super complete, accurate… was from the moment you incorporated. The second best time to tackle it is right away. Today.”
Accuracy isn’t a task to defer until an audit, it’s the foundation for growth. By moving to a dedicated equity management system, CFOs can reduce risk, streamline compliance, and set their companies up to respond quickly when opportunities arise.
>> Is your startup ready to move beyond a spreadsheet? Learn how to streamline cap table management here.
Equity Improves Talent Retention
For employees, equity is often more than compensation, it’s a vote of confidence in their future with the company. A thoughtful equity strategy signals that leadership values their contributions and sees them as part of the long-term vision.
Michelle explained how she builds retention into her process at EnFi:
“Every quarter I’m issuing new grants… it’s all about employee retention. Equity management isn’t a one-off — it’s continuous.”
This approach matters because employees typically don’t just want to know what they’re worth today, they want to see how their equity evolves as the company grows. Regular refresh grants can show commitment, while clear recordkeeping reduces the chance of disputes or misunderstandings down the line.
Education can be equally critical. Equity can be confusing, especially when it comes to taxes. Michelle emphasized this point:
“Quite often I’ve had employees consider exercising and they don’t understand the ramifications of the tax… educating them on that so that at the end of the year they get a Form 3921… they’re not surprised.”
When employees trust that leadership is transparent and proactive with equity, it creates loyalty. Equity becomes not only a financial incentive but a cultural glue, aligning everyone toward the same growth story.
Preparing for Investors Means Thinking Like One
When an investor asks for ownership data, “let me get back to you in a week” is not an acceptable answer. They expect instant clarity, and a private equity data room that’s organized, accurate, and audit-ready.
At its core, the data room is the single source of truth for diligence — a secure repository that houses legal agreements, equity grants, and financial records. It’s where investors verify that your cap table aligns with signed documents and compliance obligations. When that repository is incomplete or disorganized, it can slow diligence and casts doubt on how the company is managed. But if it’s audit-ready, it can accelerate timelines and unlock opportunities by making it easier for investors to say “yes” when you’re fundraising.
Kristen explained how much investors value data room clarity:
“Investors really expect and appreciate when the CFO is very well organized and they make it easy for an investor to know what they’re looking at, how to find what they’re looking for… [It gives them] a sense of confidence when they're looking at how you run the ship.”
For CFOs, that confidence is a competitive advantage. In a market where capital is limited and deals move quickly, being able to provide verified data on demand can set your company apart from others vying for the same dollars. Investors are more likely to lean in when they see a CFO who reduces friction rather than adds to it.
Michelle emphasized the importance of speed:
“There should never be a delay… An investor will send you an email [asking] ‘what would my ownership look like?’ and you should be able to run it instantly, not stay up all night with spreadsheets.”
The ability to deliver answers quickly isn’t just about efficiency, it’s about signaling maturity and professionalism to current and potential investors. And it can be the difference between closing a round and losing momentum.
Future-Proofing Through Scenario Planning
Equity management is more than just capturing the past, it’s about preparing for the future. Scenario modeling allows CFOs to anticipate how new funding rounds, exits, or option pool refreshers will affect ownership, and to do so with confidence rather than guesswork.
Kristen emphasized the need for proactive planning:
“You want to be able to map out future scenarios — fundraising, IPO, acquisition — and do it with ease, regardless of stage.”
A key part of that modeling is the waterfall analysis. In simple terms, it maps how proceeds from a liquidity event, like an acquisition or IPO, would “flow down” to different stakeholders based on their ownership and rights. For CFOs, having the ability to run these analyses quickly is invaluable. It shows not only who gets what in best-case scenarios but also how down rounds could affect each stakeholder.
This type of visibility is also a critical part of employee communications and retention. As our founder’s guide to managing startup equity compensation notes, equity isn’t just about numbers — it’s about helping people understand the value of their stake and how it plays out in different outcomes.
Michelle described why waterfall analyses matter so much in practice:
“There are things that you cannot predict. Somebody comes in and says ‘hey, I want to invest’ and you have to look at the waterfall to see what's in the money, what's not, where everything falls out. [This] gives you directional accuracy as to where you're going so you can make informed decisions or come to a conversation more prepared.”
For CFOs, foresight ensures they can respond quickly when opportunities arise and strengthens day-to-day decision-making. Scenario planning transforms equity from a static record into a dynamic strategy tool.
The CFO’s Edge: Equity Management as Strategy
Mastering startup equity management isn’t just about tracking ownership — it signals the maturity of your leadership. Investors, boards, and employees all look to the cap table as proof of credibility, foresight, and discipline.
As the CFO Leadership Council webinar made clear, equity management is a strategic advantage. It builds investor trust, strengthens employee retention, enables scalability, and keeps companies prepared for fundraising due diligence at every stage.
Ready to see how an integrated platform can simplify equity for your company? Schedule a demo today.
1222785.1.0
%20(1).png?width=164&height=36&name=Fid_Logo_Blk%20(1)%20(1).png "Fidelity Investments"){kind=logo}
