What Do Early-Stage Investors Most Often Miss?
The pattern list from post-mortems: founder histories that omitted a fraud-tainted previous venture; 'revenue' that was GMV, bookings or barter depending on the slide; marquee customers who were pilots, prospects or relatives; co-founder disputes already smouldering in the cap table; and personal-expense leakage through company accounts that became culture. None of these require forensic genius: they require someone actually checking.
What Does Proportionate Verification Cover?
The angel-and-seed appropriate file:
- Founders: identity, education and career claims verified; litigation, defaults and previous-venture conduct traced
- Metrics: definitions pinned in writing and sampled against raw data, the definition slippage is where inflation lives
- Customers: a handful of reference calls to claimed logos: minutes that regularly change decisions
- Legal hygiene: cap table versus claims, IP actually assigned to the company, statutory filings current
- Money conduct: banking behaviour scan for related-party flows and lifestyle leakage
How Does Diligence Scale With the Round?
Angel cheques: founder verification plus customer calls, days, not weeks. Institutional seed and Series A: the full file with market validation. Later rounds inherit M&A-grade investigative diligence. The constant across stages is founder verification, the earliest, cheapest and most predictive check in venture, because you are underwriting a person more than a plan.