The governance gap that almost stalled a raise

What was broken

A health technology startup had achieved substantial commercial success and entered discussions with institutional investors. During preliminary due diligence, the investors identified weaknesses in board governance, statutory record-keeping, compliance monitoring, and internal approval processes. Although the business was commercially attractive, governance concerns threatened the funding timeline.

What we did

CapEasy designed a governance framework tailored to venture-backed businesses. We formalized board procedures, established approval matrices, updated statutory registers, regularized historical documentation, and implemented ongoing compliance reporting mechanisms aligned with investor expectations.

Where it landed

The company significantly strengthened its governance standards, reducing investor concerns during due diligence and improving readiness for future funding rounds and strategic partnerships.

Investor diligence tests the board, not just the balance sheet

A commercially strong company can still stall in diligence for the same reason this one nearly did: the investor asks how decisions actually get made, and the paper trail does not back it up. For a Delaware corporation, board action has a specific form under the Delaware General Corporation Law — a meeting with minutes, or written consent signed by every director under DGCL §141(f). Institutional counsel checks whether every material decision — an option grant, a debt facility, a related-party deal — has one of those two behind it, dated before the decision took effect, not reconstructed after.

The gap that trips founders up is not fraud, it is informality: a decision made on a call, agreed in Slack, never reduced to a signed consent. Nothing about that is unusual pre-seed. It becomes the diligence item the moment an institutional investor’s counsel opens the data room.

Written consent has a hard unanimity rule

DGCL §141(f) lets a board act without a meeting, but only if every director then in office consents in writing or by electronic transmission — six signatures out of seven directors is not a valid consent, it is an invalid one. A governance framework that survives diligence keeps a consent log, not a folder of scattered PDFs — one register showing what was decided, when, and whose signature is on it.

The same statute, at §141(c), lets the board delegate authority to a committee — an audit committee, a compensation committee — but only "to the extent provided in the resolution of the board... or in the bylaws," and never for matters the statute reserves to the full board or the stockholders. An approval matrix works from that same principle: it names, for each category of decision, who is authorized to approve it and under what delegation, so an investor can trace a signature back to the resolution that permitted it.

The reporting rhythm a board — and its next investor — actually reads

Board minutes and consents establish that a decision happened; they do not establish that the board was informed when it happened. Institutional investors expect a recurring board pack tied to the same numbers as the ledger — burn, runway, the metrics specific to the business — on a fixed cadence, not assembled retroactively for the data room. That pack is what turns "we govern well" into something a board member, and later an investor’s counsel, can independently verify against the books.

CapEasy’s part in that work is the mechanics: minutes drafted and filed against every meeting, the consent register kept current, statutory registers reconciled to what the board actually approved, and the recurring reporting pack built on the same numbers each period. Legal sufficiency of the corporate actions themselves, and any filings that follow from them, run through your counsel and the partner CPA firms we work with across 15 US states.