Capital Is Lost in Reasoning Failures—
Not Markets
Validity audits the logic inside investment documents before capital is committed—exposing hidden assumptions, fragile theses, and narrative-driven risk.
Validity does not rewrite documents or assess tone. It evaluates whether investment theses hold up under logical scrutiny.
Most Investment Losses Start on Paper
Before a trade fails or a portfolio underperforms, the warning signs usually exist in the memo.
- Market size assumptions stacked without evidence
- Linear projections built on fragile causal chains
- Selective data used to support a predetermined conclusion
- Risk sections that describe uncertainty without quantifying it
These are reasoning failures, not market surprises. Validity is designed to surface them before money moves.
A Logic Audit for Investment Decisions
Validity analyses investment memos, pitch decks, research notes, and IC papers to evaluate:
- Whether conclusions follow from evidence
- Where assumptions are doing unacknowledged work
- How dependent outcomes are on single points of failure
- Where confidence exceeds justification
It does not generate recommendations. It does not predict markets. It evaluates how the investment case is constructed.
Before the IC. Before the Allocation. Before the Risk Committee.
Validity is used at three critical points:
1. Pre-IC Review
Stress-test the internal logic of a thesis before it reaches decision-makers.
2. External Pitch Evaluation
Audit vendor, GP, or founder materials for overreach, selective evidence, and unsupported claims.
3. Portfolio Risk Review
Re-evaluate legacy theses as assumptions change over time.
What It Detects
Validity flags patterns commonly associated with capital misallocation:
Assumption Stacking
Returns depend on multiple unverified conditions holding simultaneously.
Causal Overreach
Outcomes asserted without mechanisms, precedent, or sensitivity analysis.
Narrative Anchoring
Evidence selected to support a conclusion formed in advance.
Risk Compression
Downside described qualitatively while upside is quantified.
False Precision
Highly specific projections unsupported by data resolution.
Sample Output
Inferential Chain Breakdown
Projected returns rely on three sequential assumptions regarding adoption rate, pricing power, and regulatory stability. None are independently validated. Failure of any single assumption materially undermines the thesis.
Unsupported Causality
The memo asserts market maturity will drive customer adoption without identifying a causal mechanism or comparable precedent.
Selective Evidence
Quantitative support is provided for upside scenarios only. Downside cases lack data symmetry.
It Changes the Conversation in the Room
Investment teams use Validity to:
- Improve the quality of internal debate
- Reduce decision confidence driven by narrative strength
- Surface hidden fragility in "obvious" trades
- Create audit trails that survive post-mortem review when theses fail
Validity doesn't tell you what to invest in. It helps ensure your reasoning survives scrutiny.
Who It's For
Better Reasoning, Before Capital Moves
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