Soloanalyst: Our Verification Methodology

How We Verify Startup Claims

Soloanalyst was built because we were tired of watching good investors lose money to startups that looked great on paper but fell apart under scrutiny. Here's how our verification methodology works.

The Soloanalyst Approach

What Traditional Due Diligence Gets Wrong

Most investors do DD reactively:

• They take meetings as they come
• They ask random questions based on gut feel
• They make decisions without systematic verification
• They miss obvious red flags because they're focused on the story

What Soloanalyst Does Differently

We built a systematic verification engine that cross-references startup claims against 50+ public data sources in real-time. Our methodology catches the lies that slip through traditional DD.

Our Verification Layers

Layer 1: Company Verification

What we check:

• Company registration status (Secretary of State filings)
• Founding date and registered agents
• UCC filings (secured debt)
• Any garnishment or tax lien records

Data sources:

• Secretary of State databases (all 50 states)
• PACER (federal court records)
• State court records
• IRS tax lien database

Red flags we catch:

• Company registered in Delaware but no registered agent (shell company)
• Recent UCC filings indicating debt (company is borrowed up)
• Tax liens indicating financial distress
• Company dissolved or administratively revoked

Layer 2: Team Verification

What we check:

• Employment claims against LinkedIn (verified independently)
• Education claims against university alumni systems
• Previous startup outcomes against SEC and court records
• Social media authenticity analysis

Data sources:

• LinkedIn (employment data)
• University alumni databases
• Crunchbase/PitchBook (startup outcomes)
• Court records (litigation history)
• SEC EDGAR (public company filings)

Red flags we catch:

• "Co-Founder" who had no equity (just an early employee)
• "10 years of experience" that started 2 years ago
• Previous company with undisclosed lawsuits
• Education claims that don't check out

Layer 3: Financial Verification

What we check:

• Revenue claims against payment processor data
• Traffic claims against SimilarWeb and BuiltWith
• Customer concentration against public records
• Burn rate against infrastructure spending patterns

Data sources:

• Stripe dashboard verification (user-provided)
• SimilarWeb traffic analysis
• BuiltWith tech stack analysis
• LinkedIn employee count cross-reference

Red flags we catch:

• $500K ARR claimed but only 5 employees (burn doesn't match)
• "100,000 users" but website traffic shows 10K monthly visits
• Customer concentration >60% from one customer
• High-value customers that don't exist

Layer 4: Market Verification

What we check:

• TAM claims against industry databases
• Competitive positioning against G2 and Capterra
• Market size against IBISWorld, Statista, and other research firms
• Market entry timing against regulatory databases

Data sources:

• IBISWorld industry reports
• Statista market data
• G2 product comparisons
• Capterra category data
• Regulatory databases

Red flags we catch:

• "Going after a $50B market" when actual addressable is $500M
• Claims of "first mover" when competitors have 10x the market share
• Regulatory barriers not disclosed
• Market growth rates that don't match industry reports

Layer 5: Product Verification

What we check:

• Technology claims against patent databases
• Open source contributions against GitHub
• Product launch claims against App Store and Play Store
• User claims against public data

Data sources:

• USPTO patent database
• GitHub public repositories
• App Store rankings
• Google Play Store data
• SimilarWeb product analysis

Red flags we catch:

• "Proprietary AI" that uses the same APIs as everyone else
• "Patented technology" with no USPTO filing
• Claims of app store ranking that don't match public data
• "Live product" that's been "coming soon" for 6 months

The Verification Report

What You Get

When you run a Soloanalyst verification, you receive:

1. Company Score (0-100)

• Based on registration status, debt filings, and legal issues
• 80+ = clean company
• 60-80 = some red flags (review carefully)
• <60 = significant issues (pass or negotiate harder)

2. Team Score (0-100)

• Based on employment verification, education verification, and legal issues
• 80+ = verified credentials
• 60-80 = some claims unverifiable (ask for documentation)
• <60 = significant red flags (pass or get direct references)

3. Financial Score (0-100)

• Based on revenue verification, traffic verification, and burn rate analysis
• 80+ = metrics check out
• 60-80 = some inconsistencies (ask for documentation)
• <60 = significant discrepancies (pass or ask for bank statements)

4. Market Score (0-100)

• Based on TAM verification, competitive positioning, and market timing
• 80+ = market claims reasonable
• 60-80 = some inflation (recalculate with real numbers)
• <60 = significant overestimation (negotiate lower valuation)

5. Product Score (0-100)

• Based on technology verification, launch verification, and user verification
• 80+ = product claims check out
• 60-80 = some unverifiable (ask for demo or POC)
• <60 = significant gaps (reassess product-market fit)

Composite Score (0-100)

• Weighted average of all 5 layer scores
• 80+ = proceed with confidence
• 60-80 = proceed with caution
• <60 = pass or renegotiate

The Red Flag Report

Automatic Alerts

Soloanalyst automatically flags:

• SEC/FTC actions involving the company or founders
• Federal court records with fraud or breach of fiduciary duty
• Employment history discrepancies
• Revenue claims that don't match public data
• TAM inflation >10x actual market size

Alert Severity Levels

Critical (red flag immediately):

• Founder has SEC fraud record
• Company has federal court fraud case
• Revenue claims >5x verifiable data
• TAM inflation >20x actual market

High (investigate further):

• Previous startup with undisclosed failure
• Employment gap with no explanation
• Customer concentration >50%
• Patent claims unverifiable

Medium (clarify before deciding):

• Education gap (ask for transcript)
• Social media sparse (verify manually)
• Market timing unclear (get more data)
• Burn rate slightly high (ask for breakdown)

How We Handle Verification Resistance

The Pattern

Some founders won't share documentation. Here's our approach:

1. If they won't show Stripe:

   • We note this and flag it
   • We check public data for traffic and user estimates
   • We ask for alternative documentation (bank statements, CPA letter)

2. If they won't show contracts:

   • We note customer concentration as unverifiable
   • We check for public customer announcements
   • We ask for customer references

3. If they won't provide references:

   • We note this as a red flag
   • We do manual LinkedIn verification
   • We proceed only with strong conviction on other factors

When to Walk Away

• They refuse documentation on critical claims (revenue, team background)
• Soloanalyst flags critical-level red flags
• Composite score is <50
• Multiple high-level red flags that founder can't explain

Our Data Sources

Public Databases

• Secretary of State (all 50 states)
• PACER (federal court)
• SEC EDGAR
• USPTO (patents)
• IRS 990 filings (nonprofits)
• LinkedIn (employment/education)
• Crunchbase/PitchBook (funding history)

Industry Research

• IBISWorld (industry reports)
• Statista (market data)
• Gartner (market research)
• Forrester (market analysis)

Traffic & Product

• SimilarWeb (website traffic)
• BuiltWith (tech stack)
• G2 (product comparisons)
• Capterra (software reviews)
• App Store data
• Google Play Store data

Social & Community

• Twitter/X (social verification)
• Medium/Substack (thought leadership)
• GitHub (open source contributions)
• Product Hunt (launch verification)

Why Our Methodology Works

The Layered Approach

No single data source is definitive. By layering multiple sources:

• We catch lies that single-source verification misses
• We build conviction through cross-reference consistency
• We identify which claims need manual follow-up

The Time Advantage

Traditional DD takes 10+ hours per deal. Soloanalyst does the same verification in 5 minutes, so you can:

• Screen more deals without additional time investment
• Focus human hours on high-conviction opportunities
• Catch things manual DD often misses

The Objectivity Advantage

Human DD is subject to narrative bias. We see what the data shows, not what the founder wants us to see.

Key Takeaways

1. Systematic beats reactive - Soloanalyst catches what intuition misses
2. Layered verification - No single source is definitive
3. Objectivity matters - We see the data, not the story
4. Documentation is key - Refusal to document = red flag
5. Walk away when it doesn't add up - The best deal is the one you didn't lose money on

Try Soloanalyst

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Soloanalyst - Because every investment starts with a question, and verification should answer it.