Is it safe to put a cap table or term sheet into ChatGPT?
Short answer: It depends on the plan you use and what the document reveals. Here is how a founder or investor should decide before pasting deal papers.
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Is it safe to put a cap table or term sheet into ChatGPT?
It depends on the plan you use and on what the document reveals, so there is no one answer for every deal. Read the current terms of the exact plan you would use, because business plans usually differ from personal plans.
The better question is what you lose if the document ends up in the wrong hands. For a cap table or term sheet, that can be a lot, even with the names removed.
What do a cap table and a term sheet reveal, even without names?
A cap table, the list of who owns what share of a company, shows ownership splits, option pools and how much each round took from the founders. A term sheet, the short document that sets the main terms of a deal, shows the valuation, the price per share and the conditions attached.
Together they show how strong or weak your position is. A reader who sees a number, a date and a round size can often guess the company, and the other side of a negotiation can use these facts against you.
What could an exposure cost you?
The cost is usually your negotiating position. If another bidder, investor or buyer learned your floor price or your fallback terms, you could lose room to bargain.
Many term sheets and NDAs, short for non-disclosure agreements, also bar you from sharing the deal terms with outsiders. Pasting them into a shared app might conflict with that clause. Whether it does is a question for your own counsel.
How can you work with AI on a deal without pasting the deal?
Give the AI the shape of the problem, not the facts. Swap names and numbers for placeholders such as Investor A, Company X and $[amount], then ask for structure or wording help only.
Paste single clauses, not the whole document. A clause on its own says far less than the full set, and you can add the real terms back yourself afterward.
- Replace company, investor and person names with labels.
- Replace dollar amounts, share counts and dates with brackets.
- Paste one clause at a time, never the full term sheet.
- Ask for plain-English rewrites or a list of questions to raise.
What should you ask the AI to explain, and what should you do yourself?
Use the AI to explain a term in general, and do your own arithmetic. A liquidation preference is the rule that says who gets paid first, and how much, when a company is sold. A vesting cliff is the period before any shares vest. Anti-dilution is a protection that adjusts an investor's price if you later sell shares more cheaply.
Do not hand over your real numbers and trust the sums. The AI can get figures wrong and can make things up, so run the math yourself or with your finance team, and check every output before you use it.
What should you check before you paste?
Run through this list first, every time. If any line fails, leave the document out or ask your counsel.
- Did you read the current terms of the exact plan you use?
- Does an NDA or the term sheet itself limit who may see the terms?
- Are all names, amounts and dates replaced with placeholders?
- Are you pasting a clause rather than the whole document?
- Will you check any figure the AI gives you by hand?
When is a private setup worth considering for deal documents?
A private setup is worth a look when you handle deal papers often and want fewer parties holding them. It is an assistant running in a cloud account you own, so the documents sit with you and not in a shared app.
For how a private assistant fits that work day to day, see the founder and operator page, and compare it with the question of pasting client data into ChatGPT.
If you would rather have a person do it, see the private AI setup service. If you would rather build it yourself, start with the DIY guides.
What are the limits?
A private setup lowers the number of parties that hold your data. It does not remove the need for strong passwords, access limits, backups and your own review of every answer.
This is general information, not legal or financial advice. Ask your own counsel whether a tool fits your confidentiality duties, and ask your finance adviser about the numbers. More questions are answered in the private AI answers hub.
Questions
Is removing the names enough?
Not always. Valuation, round size and dates can point to a company on their own, so replace amounts and dates too, or paste only a general clause.Can I ask the AI to calculate dilution for me?
You can ask it to explain how dilution works, but run your real numbers yourself or with your finance team. The AI can get figures wrong, so check every result.Does a business plan change the answer?
It may, since business plans usually differ from personal plans. Read the current terms of the exact plan you use and ask your counsel what they mean for deal papers.What about an option plan or an acquisition draft?
The same method applies. Strip names and numbers, share clauses instead of the whole file, and keep the final figures and signatures out of the tool.Should I tell my lawyer I used an AI tool?
Ask your lawyer how they want drafts and questions handled before you start. They can tell you what your NDA and any duties allow.Related guides
- Private AI for founders who cannot paste their company into a chatbot
- Run AI without a public chatbot seeing your data
- Private AI vs ChatGPT: what you actually give up and gain
- Done-for-you private AI setup service
- Private AI answers
- What is a private alternative to ChatGPT, and which kind keeps your data where you want it?
- Private uncensored AI: the full guide
- All guides to getting your own private AI agent
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