What to verify before you write a $5k check

There’s a well-worn argument that a $5,000 angel check doesn’t deserve diligence — the check is too small, the odds too long, the work not worth it. Half right. The deep diligence a fund runs before a $2M check would indeed be absurd at $5k. But the argument quietly smuggles in a false choice: weeks of work, or none. The truth is that a small number of fact checks — the kind you can finish in an afternoon — catch the failures that have nothing to do with whether the idea is any good. Those are the ones worth doing.

What you’re actually checking (and what you’re not)

You are not checking whether the company will win. You can’t. Early-stage returns follow a power law: most of your checks won’t work out, and the ones that carry the portfolio are the ones you couldn’t have identified as sure things in advance. Diligence doesn’t fix that, and pretending it does is how small investors talk themselves into false confidence.

What you can check is whether the facts in front of you are real. Not promising — real. That’s a narrower and much more answerable question, and it’s where an afternoon pays off.

The short list

Is the company cleanly incorporated? A real entity, in a real state (usually Delaware), with the organizational documents that turn a filed certificate into a functioning company. A founder who can’t show you clean formation is a founder whose everything-else is likely also improvised.

Does the cap table tie out? This is the big one. Every share, option, and SAFE should be backed by an executed document, and every document should have a matching line. A table that doesn’t reconcile means the stake you’re buying may not be the stake you think you’re buying. How a cap table ties out →

Do the numbers match their source? If a founder tells you they’re at $40k MRR, that figure should trace to something — a Stripe account, a bank feed — not a slide. A number you can’t source is a number you’re taking on faith.

Are they actually raising the way they say? A company’s own Form D filing tells you the offering size, how much has sold, and under which exemption — all public, all filed with the SEC. It’s a free, factual cross-check on the story you’re being told. What a Form D tells you →

Are you eligible to invest at all? Most early rounds are open only to accredited investors, and the responsibility to get that right is shared. Accredited-investor self-certification →

The point of the afternoon

None of these five checks tells you whether to invest. They tell you whether the thing you’d be investing in is what it claims to be — which is the part you can actually know. Get the facts straight, then make the bet on conviction, knowing the ground under it is real. That’s what a good small check looks like: fast where speed is fine, rigorous exactly where rigor is cheap.

Standing is built to make that afternoon take minutes instead — verified company state, cap tables that tie out, numbers pulled from the source. Come see what’s being built →