How to Verify a Startup Before Investing
India has 100,000+ registered startups. A fraction of them have verifiable traction, real funding, and honest founders. Here's a checklist you can run in under 30 minutes to separate the real from the hype.
Why startup verification matters
Startup fraud in India is not an edge case — it's endemic. From fabricated ARR numbers to ghost investors, the incentives to exaggerate are high and the consequences (until recently) were low. High-profile collapses like BharatPe, Zilingo, and GoMechanic all had publicly available signals that were ignored.
The good news: most fraud is detectable with free public data if you know where to look.
Step 1: MCA21 registry check
Every legitimate company incorporated in India has a CIN (Corporate Identification Number) on the Ministry of Corporate Affairs (MCA21) portal. Search by company name and verify:
- Company status is "Active" (not struck off or under liquidation)
- Date of incorporation matches what the startup claims
- Registered address is real (not a virtual office with no history)
- Paid-up capital is consistent with claimed funding
A startup claiming ₹50Cr in funding with ₹1 lakh paid-up capital is worth investigating further.
Step 2: Crunchbase funding verification
Crunchbase aggregates funding announcements from press releases, SEC filings, and direct submissions. Search the startup name and check:
- Funding rounds match what was announced publicly
- Investor names are real, identifiable firms or angels
- Lead investors have a track record (check their other investments)
A startup that claims "Series B — $10M" but has no Crunchbase entry and no news coverage of the round is a red flag.
Step 3: Google News search
Search: [startup name] fraud OR scam OR lawsuit OR controversy
Then search: [startup name] funding OR revenue OR growth
Real startups leave a news trail. Growth-stage companies with no press mentions outside of their own blog are worth scrutinizing.
Step 4: App Store / Play Store
If the startup has a consumer product, it should have an app with real reviews. Check:
- Number of downloads (1M+ for a startup claiming mass adoption)
- Review sentiment — are negative reviews about real product problems or fraud?
- Last update date — an abandoned app with recent funding claims is suspicious
Step 5: Website and domain age
Use a WHOIS checker (whois.domaintools.com) to find when the domain was registered. A startup claiming 4 years of operation with a domain registered 8 months ago is lying about its founding date or recently rebranded — both worth investigating.
Step 6: Founder verification
LinkedIn is the easiest cross-reference. Check:
- Previous companies — do they match what the founder claims?
- Education — verifiable institutions, not vague "IIT dropout" claims
- Profile age and connection count — fresh profiles with 50 connections for a "serial entrepreneur" are suspicious
The shortcut: TruthScore
TruthDeck automates this entire checklist. Every startup on our platform gets a TruthScore from 0–100 based on automated checks across MCA, Crunchbase, Google News, App Store, and website signals. Scores above 75 are Verified. Below 45 are Unverified.