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

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.