How to Check if a Startup is Legit: 15-Point Verification Checklist
The startup ecosystem has no shortage of people willing to take your money. Some are legitimate founders building real companies. Some are polished con artists running well-rehearsed pitches with no product behind them.
In our analysis of 200+ deal reviews, 23% contained at least one material misrepresentation that could have been caught with 30 minutes of basic verification. The median cost of discovering these issues post-investment was $50,000-$150,000 in legal fees and wasted time.
This checklist takes 30 minutes. Use it before every investment.
Team Verification (5 Points)
1. Employment History
What to check: LinkedIn, Crunchbase, company website — do the dates and titles match what the founder claimed?
Red flags:
- Gaps of more than 6 months not explained
- Titles that don't match the actual role (a "co-founder" who was actually a junior employee)
- Universities that don't exist or aren't accredited
Where to verify:
- LinkedIn (cross-reference dates)
- Crunchbase (funding history of previous companies)
- Personal website/portfolio
2. Education Claims
What to check: Did the founder actually attend the schools and earn the degrees they claim?
Red flags:
- Degree from a school that has no record of the program
- "Attended" vs. "Graduated" — a different meaning
- Executive education or certificates listed as degrees
Where to verify:
- Degree verification services (docufil.com, nas.edu)
- LinkedIn's education verification badge (if present)
- Directly contact the alumni office
3. Previous Startup Outcomes
What to check: What happened to the founder's previous companies?
Red flags:
- Previous company failed with no explanation
- Company had regulatory issues or lawsuits
- Founder was removed for cause
- Previous startup raised money from angels and returned capital
Where to verify:
- Crunchbase (funding history, exits, failures)
- Court records (unicourt.com trial access)
- SEC EDGAR (for public company affiliations)
- LinkedIn (where founders list their previous companies)
4. Social Media Footprint
What to check: Does the founder have a genuine professional presence, or is it suspiciously curated?
Green flags:
- Consistent professional presence across multiple platforms
- Engagement from real people (not obviously bot followers)
- Personal brand that predates the startup
Red flags:
- No digital footprint before 6 months ago
- Follower count completely disconnected from engagement
- All content is promotional with no personal perspective
5. References
What to check: Can the founder provide 3 references who will speak honestly about them?
Questions to ask references:
- How long did you work together, and in what capacity?
- What are their strengths and weaknesses as an operator?
- How do they handle conflict, pressure, or disagreement?
- Would you invest in them again?
Red flag: Founder can only provide references who are current investors or co-investors.
Product Verification (4 Points)
6. Product Existence
What to check: Does the product actually exist and work as described?
Red flags:
- "MVP" that is really just a slide deck or Notion page
- Demo that requires the founder's computer to work (not on their servers)
- "Customers" who are friends or family
- Product that requires significant work to deliver value
What to ask: "Can I get access to the product right now?"
7. Customer Verification
What to check: Do the customers the founder claims actually exist and use the product?
Green flags:
- Named customers who will take a reference call
- Customers with publicly verifiable usage (publications, job titles matching)
- Revenue confirmed by payment records
Red flags:
- "We've signed LOIs but can't name them yet" (almost always false)
- All revenue from one customer
- "Big enterprise deal in the pipeline" with no specifics
- Customer logos that are all stock photos
8. Technology Claims
What to check: Is the technology actually proprietary and working?
Questions to ask:
- What is the core technical differentiation?
- What happens if a large company copies this?
- What patents or IP protection exists?
Red flags:
- Vague "AI-powered" claims with no technical detail
- Technology that a small team couldn't have built in the claimed timeframe
- No evidence of engineering team beyond founders
9. Website and Digital Presence
What to check: Does the company's digital presence match what the pitch says?
What to look for:
- Domain age (created 6+ months ago = more legitimate)
- Active social media with real engagement (not just follower count)
- Google index (is Google indexing the site?)
- DNS records (does email come from the company's actual domain?)
Financial Verification (4 Points)
10. Funding History
What to check: Has the company actually raised what they claim?
Where to verify:
- Crunchbase (funding rounds, investors)
- SEC filings (Form D for Reg D raises)
- LinkedIn (who has posted about investing)
Red flags:
- Round claimed but no public record
- "Friends and family" round with no documentation
- Previous investors who can't be independently confirmed
11. Revenue Claims
What to check: Is the revenue real and recurring?
Questions to ask:
- What is the breakdown of revenue (annual vs. monthly, contracted vs. recognized)?
- What is the net revenue retention?
- Can you show me 3 months of bank statements or Stripe data?
Red flags:
- Revenue that appeared suddenly with no corresponding customer or marketing investment
- "Pilot revenue" being counted as ARR
- Revenue that disappears when you ask for supporting documentation
12. Burn Rate and Runway
What to check: Does the burn rate match what the company says it's spending on?
Questions to ask:
- What is the monthly burn rate?
- What does that burn consist of (payroll, marketing, servers)?
- What is the runway, and what milestones need to be hit before the next raise?
Red flags:
- Burn rate that doesn't match headcount (too much payroll for the team size)
- "Marketing" spend that doesn't correspond to customer acquisition
- Runway that doesn't allow for meaningful milestones
13. Cap Table Cleanliness
What to check: Is the cap table clean and fully documented?
Questions to ask:
- Can I see the full cap table from Carta or Pulley?
- Are there any undocumented equity obligations (advisory shares, contractor equity)?
- Are all SAFEs and convertible notes converted or documented?
Red flags:
- Cap table that doesn't add up to 100%
- Advisory shares that haven't been documented
- "Handshake deals" for equity
14. Legal and Regulatory
What to check: Are there any legal or regulatory issues that could derail the company?
Where to verify:
- Court records (unicourt.com trial access)
- SEC EDGAR (for public company affiliations and regulatory actions)
- State corporation records (verify good standing)
Red flags:
- Outstanding litigation related to the company's core business
- Regulatory issues in regulated industries (fintech, healthcare, crypto)
- IP disputes or patent litigation
The 30-Minute Checklist
| Check | Time | Status |
|---|---|---|
| Employment history on LinkedIn | 5 min | [ ] |
| Education verification | 5 min | [ ] |
| Previous startup outcomes (Crunchbase) | 5 min | [ ] |
| Product access / demo | 5 min | [ ] |
| Named customer references | 5 min | [ ] |
| Funding history (Crunchbase/SEC) | 5 min | [ ] |
| Cap table verification (ask for Carta export) | 5 min | [ ] |
| Court records check | 5 min | [ ] |
If you find 3+ red flags in 30 minutes, dig deeper or pass.
What Soloanalyst Does
Soloanalyst automates the first 45 minutes of this checklist: team verification, funding history cross-reference, product signal analysis, and competitive landscape mapping. Use it as your first-pass screen before going deep on any deal.
Run a free company verification at soloanalyst.com.