From DIY Chaos to Investor Ready: How Fractional GC Turns DIY Chaos Into A Clean, Investor-Ready Stack

Standard Disclaimer

This post is for general informational purposes only and is not legal advice. You should consult a lawyer about your specific situation before acting on any of the information in this article.

TL;DR

• DIY co-founder agreements plus entity changes (like moving to a different state) often create hidden legal and cap table problems.
• Investors and acquirers care deeply about how founder equity, vesting, and rights are documented and whether your paperwork tells one coherent story.
• A fractional general counsel can quietly clean up your founder stack, align documents with reality, and get you investor-ready without the cost of a full-time GC.

Does This Sound Uncomfortably Familiar?

Check yourself quickly:

• You converted (or plan to convert) to a Delaware C-corp, but your old documents from the early LLC days never really got updated.
• Your initial agreements started from a template or another startup’s documents, and have been edited over time.
• Your cap table, your charter, and your actual promises to co-founders don’t match perfectly.
• You’re planning to raise capital in the next 6–18 months.

If you’re nodding at even one of these, you’re exactly the type of company fractional GC support is designed for.

The “Oh No” Moment Before Fundraising

It often starts with a simple request from a prospective investor:

“Can you send over your cap table and founder agreements?”

The team pulls everything together: Delaware incorporation documents, an early co-founder agreement grabbed from the internet, a spreadsheet cap table that “roughly” matches what everyone thinks they own. Then you realize nothing lines up.

• The entity has changed over time (for example, from an LLC to a C-corp), but the old equity agreements were never updated.
• One founder’s equity is subject to unusual milestone-based vesting; another is on a different schedule entirely.
• The numbers in the contract don’t quite match the numbers in the cap table, and no one is sure which version is “real.”

From the founders’ perspective, it feels like a paperwork nuisance.

From an investor’s perspective, it’s a flashing red light:

• Who actually owns this company?
• Will the founders end up fighting about equity after we wire money?
• Is there hidden risk we’ll have to clean up later?

This is where a fractional general counsel earns their keep. Instead of reacting one document at a time, your GC can step in, untangle the past, and rebuild the legal structure so it’s clear, consistent, and investor-ready, all without the overhead of a full-time in-house lawyer.

One of the most common (and most fixable) problems we see is the DIY co-founder agreement that no longer fits the company you’ve become.

The Hidden Risks of DIY Founder Agreements

Founders are resourceful. It’s common to see founder agreements that started life as:

• A template downloaded from a random blog (or even a respected blog)
• A contract adapted from a friend’s startup
• A heavily edited version of an employee offer letter
• A template from an accelerator

The intent is good: “We want to move fast and get something in writing.”

The problem is that co-founder relationships are foundational, and investors will look directly at how those relationships are documented.

Here are a few patterns that cause trouble later.

1. Milestone-based founder vesting

We often see clauses that say some portion of a founder’s equity will vest only if they:

• Ship specific product features
• Hit certain revenue or user targets
• Complete a list of technical deliverables that “we’ll define later”

On paper, that sounds like accountability. In reality, it creates:

• Ambiguous vesting triggers
  
  • What counts as “completed”?
  • Is a prototype enough, or does it need to be deployed and used?
  • What if priorities change and the feature is completed but no longer relevant?
• Built-in renegotiation
  
  • Every time the roadmap changes, you’re implicitly renegotiating equity.
  • Product discussions become equity discussions, which is a fast path to tension.
• Litigation and relationship risk
  
  • If the relationship sours, you now have a high-stakes dispute over whether a milestone was met and who gets how much equity.

Investors don’t want to underwrite subjective disputes about whether a particular feature was “shipped” to a sufficient standard. They want to see clean, time-based vesting for founders that’s easy to understand and easy to diligence.

A fractional GC’s job is to translate the founders’ original intent (“we want this person to keep delivering”) into a structure that’s both enforceable and investor-friendly, usually by moving to standard time-based vesting and using non-equity tools (role definition, governance, performance management) to handle product milestones.

2. 100% acceleration on change of control

Another common DIY clause: if the company is sold, all unvested founder equity vests immediately.

From a founder’s perspective, that may feel fair: “If we build this and it succeeds, we should all be fully vested on exit.”

From an investor’s and acquirer’s perspective, it can be a serious problem:

• If every founder fully vests at closing, they have no remaining equity-based incentive to stay and help integrate the business.
• Acquirers may insist on complex retention packages or simply reduce what they’re willing to pay.
• Future investors may require those terms to be renegotiated as a condition of funding.

Modern market practice tends to favor modest, double-trigger acceleration (for example, a portion of unvested shares vesting if there’s a sale and the founder is terminated without cause), not blanket 100% acceleration for everyone.

A fractional GC can help calibrate this: enough protection so founders aren’t left exposed in a sale, but not so generous that it scares away serious buyers or institutional investors.

3. Misalignment with the cap table and formation documents

DIY co-founder agreements often get signed before the company has a formal Delaware charter, bylaws, or option plan. Later, when the company incorporates or converts entities, nobody goes back and reconciles:

• The numbers in the co-founder agreement
• The numbers in the cap table spreadsheet
• The numbers in the Certificate of Incorporation, board consents, and stock ledger

The result:

• The co-founder contract says one thing.
• The state-filed documents say another.
• The cap table tries to split the difference.

During diligence, that misalignment is cheap to discover but expensive to fix, especially if one founder believes they’re entitled to more equity than the “new” structure reflects.

A fractional GC’s value here is intentionally boring: making sure there is one source of truth, and that every document, the charter, board resolutions, founder agreements, option plan, stock ledger lines up with it.

What a Fractional GC Actually Does in This Situation

When a fractional GC steps into a situation like this, the work generally falls into three buckets: diagnose, rebuild, and future-proof.

1. Diagnose: what’s the real story?

The first step isn’t drafting; it’s understanding.

We’ll typically:

• Talk with the founder team about:
  
  • What you thought you agreed to at the time
  • What each founder believes they own today
  • What your target split is going forward
• Pull the documents:
  
  • Original co-founder agreements
  • Any LLC / pre-incorporation documents
  • Delaware Certificate of Incorporation and Bylaws
  • Board and stockholder consents, option plans, advisory agreements
  • The cap table you actually use to run the business
• Reconcile the story:
  
  • What’s been signed?
  • What’s been filed with the state?
  • What’s only lived in email or a shared doc?

Before anything changes, there needs to be one coherent picture of what’s supposed to be true.

2. Rebuild: make the paper match reality (and the law)

Once the current state is clear, we can start rebuilding the legal stack in a way that’s both accurate and market-standard.

That often includes:

• Aligning the charter and authorized shares
  
  • Ensuring there are enough authorized shares to match the intended founder equity and option pool.
  • Drafting and filing any necessary charter amendments and related board/stockholder approvals.
• Re-papering founder equity
  
  • Converting informal promises or legacy LLC arrangements into founder stock purchase agreements (or the equivalent) with:
    
    • Clear, time-based vesting
    • Company repurchase rights
    • Thoughtful, acceleration (if any)
  • Making sure vesting schedules, share counts, and repurchase terms match across agreements, the cap table, and the stock ledger.
• Standardizing IP and employment documents
  
  • Ensuring every founder has:
    
    • A signed Confidential Information and Inventions Assignment Agreement
    • Any necessary officer/director indemnification agreements
  • Confirming that all core IP is clearly owned by the company, not sitting informally with whoever wrote the first line of code.
• Adopting an equity incentive plan and option pool
  
  • Creating a standard equity plan and reserving an option pool sized to match your hiring plans.
  • Making sure future hires and advisors fit into the same structure instead of creating new one-off arrangements.

The end result is that your legal documents tell a single, consistent story and that story matches your spreadsheet and your actual business.

3. Future-proof: what will the next investor or acquirer care about?

A fractional GC isn’t just fixing today’s problems; they’re asking:

• What happens when a serious investor looks at this?
• Is this a structure we can live with for the next few rounds?
• Will this cause issues in an acquisition?

That often leads to subtle but important choices, such as:

• Dialing back aggressive acceleration so it doesn’t spook investors or acquirers.
• Avoiding overly bespoke founder terms that are impossible to explain later.
• Building in room for future financings (for example, extra authorized shares, a sensible option pool, and flexibility in governance).

You still end up with clear ownership, fair economics, and protection for the team but now it’s within a framework that plays nicely with the rest of the startup ecosystem.

A Quick, Anonymized Example

To make this more concrete, here’s a composite example based on several real engagements:

A SaaS founder team came to us a few months before a priced round with:

• A DIY founder agreements from their early days
• Misaligned equity splits between that agreement, the cap table, and what they’d been telling investors
• No option plan, but several informal promises of equity to key early hires

In roughly a month, we:

• Cleaned up their charter and increased authorized shares
• Re-papered founder equity with standard vesting and consistent numbers
• Adopted an equity incentive plan and a right-sized option pool
• Documented advisory and early employee grants in a way that fit the new structure

Their lead investor later commented that the “clean cap table and documentation” made internal approvals much smoother.

That’s the kind of quiet, behind-the-scenes work fractional GC is built for.

Why Fractional GC Beats One-Off, Ad-Hoc Outside Counsel

You could try to handle all of this with a series of one-off projects:

• “We need a charter amendment: call a lawyer.”
• “We need a new founder agreement: call a lawyer.”
• “We’re about to raise: call a lawyer.”

That can work, but it has limits.

1. Context and continuity

A fractional GC isn’t just seeing one document at a time. They see:

• How your founder dynamics are evolving
• How your business model and product are changing
• How each new hire, advisor, or investor fits into the bigger picture

That context matters. The “right” answer on vesting, acceleration, or option pool size depends on your stage, your hiring roadmap, and your fundraising plans, not just a generic template.

At Vidar Law, we usually plug in as fractional GC for fast-growing tech companies that don’t yet need or can’t yet justify a full-time in-house lawyer, but have enough complexity that pure ad-hoc project work isn’t cutting it anymore. That typically looks like:

• A standing point of contact for the founder team
• A clear monthly or quarterly cadence
• Priority support on cap table, financings, contracts, and product / AI risk

2. Proactive, not just reactive

With purely ad-hoc counsel, the pattern tends to be:

“We have a problem; let’s get a document.”

With fractional GC, the pattern becomes:

“We have a plan; let’s make sure the legal side supports it.”

That shift means:

• Potential issues get spotted before they become emergency clean-ups.
• Co-founder changes, new markets, and fundraising plans are all viewed through a legal and strategic lens.
• You get a consistent approach to equity, IP, and governance instead of a patchwork of one-off fixes.

3. Cost and efficiency

Fractional GC does not mean “expensive, full-time general counsel.” It means:

• Ongoing access to a senior lawyer
• At a cadence and scope that match your stage
• With the ability to triage and prioritize:
  
  • What must be done now to protect the company
  • What can safely wait
  • Where we can rely on existing playbooks instead of bespoke work

That balance of high context and right-sized representation, is hard to get from sporadic, single-issue engagements.

How Founders Can Avoid This Mess (or Clean It Up Gracefully)

Whether you’re still early or already dealing with legacy documents, a few steps make a huge difference.

1. Treat co-founder equity like a financing round

Don’t think of co-founder equity as “just an internal handshake.” Treat it like a serious transaction:

• Agree on:
  
  • Ownership percentages
  • Vesting schedule
  • Any acceleration (if at all)
• Paper it properly:
  
  • Founder stock purchase agreements (or the appropriate equivalent)
  • Board and stockholder approvals
  • Clear cap table and stock ledger entries

If you wouldn’t be comfortable explaining the structure to a future lead investor, that’s a sign something needs attention.

2. Revisit old agreements after major structural changes

If you:

• Convert from an LLC to a C-corp
• Move to new jurisdiction
• Bring on a meaningful new co-founder or senior hire

…that’s your cue to re-open the folder:

• Do the old agreements still make sense?
• Do they match the new entity and charter?
• Do the numbers line up across all documents?

A fractional GC can use these inflection points to quietly clean up the past, not just bolt new agreements on top.

3. Standardize early, customize sparingly

Not everything needs to be bespoke. In fact, very little does.

• Use standard vesting for founders and employees (for example, four years with a one-year cliff).
• Use standard acceleration patterns (if any), rather than inventing a new formula for every scenario.
• Customize only when there’s a clear strategic reason and know how you’ll explain that to your next investor.

Consistency here is a feature, not a bug.

Who Vidar Law Is (and Isn’t) a Good Fit For

We’re usually a good fit if:

• You’re a tech or product-driven company growing quickly
• You’ve recently converted to Delaware or are planning to
• You expect to raise a meaningful round in the next 6–18 months
• You want an ongoing relationship with a lawyer who understands your business, not just one-off document help

We’re probably not the right fit if:

• You’re only looking for standalone templates with no ongoing advice
• You already have a full-time GC and just need occasional overflow support

Next Step: A Focused “Founder Stack Review”

If this post feels a little too close to home, it might be time to take a more structured look.

For founder teams who are adding co-founders, cleaning up a conversion, or preparing for a fundraise, we offer a focused Founder Stack Review, which typically includes:

• A review of your charter, founder equity documents, and cap table
• A short call to walk through the top issues we see
• Practical options for cleaning things up in a way that’s investor-friendly and realistic for your stage

If that would be helpful for your company, you should schedule a consultation.

Your product may be scaling fast. Your legal foundation should be able to keep up.