
How to vet a startup? - notyourwork
Fellow risk takers, I want to start a dialog about how you might vet a startup?<p>Hypothetically you are approached by a startup who wants you to join the team. You are interested in the startup and want to mitigate your potential risk by validating the claims being made.  What due diligence can be done to ensure the startup is legitimate and has the finances they claim to have?  For example, if a startup says we have $X in revenue how can you be certain this is true?<p>I did some searching and but didn&#x27;t find any other hackernews discussions.
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jacquesm
[https://news.ycombinator.com/item?id=7116357](https://news.ycombinator.com/item?id=7116357)

[https://news.ycombinator.com/item?id=7290749](https://news.ycombinator.com/item?id=7290749)

[https://news.ycombinator.com/item?id=8759250](https://news.ycombinator.com/item?id=8759250)

[https://news.ycombinator.com/item?id=5362776](https://news.ycombinator.com/item?id=5362776)

That should get you started.

As for how you can be certain that something is true: bankstatements are
usually a pretty good start.

It's quite ok to ask for substantiation of claims at that stage, if they have
the revenue they won't hesitate to prove it (and they'll feel good about it),
if they don't have the revenues then they may back-paddle.

A very important number is how many months worth of expenses are in the bank,
in case something happens to the revenue stream (which is not unheard of in
start-up land).

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notyourwork
I think my google-fu was a bit off today clearly but I appreciate the links.
Thanks!

"Months of expenses in the bank" is a great questions. As I understand they
are claiming to have a large yearly revenue stream. This makes me want to
conclude they will be stable for some period of time, but quantifying how many
months of operating expenses are currently available gives a much more true
current position.

