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Validity
Investor Memo
For investors, partners, and serious diligence. This memo outlines the rationale, market structure, and execution plan behind Validity.
Executive Summary
Validity is a reasoning-analysis engine that audits the logical structure of high-stakes documents before they become decisions. It identifies structural failures—assumptions treated as facts, causal leaps without mechanism, selective evidence, and risk concealed in confident language.
Why This Should Exist
Decisions Fail Before They Fail Publicly
Most catastrophic decisions do not collapse because the data was unavailable, the intelligence was missing, or the people involved were unintelligent.
They fail earlier — at the level of reasoning.
Before money is lost, reputations destroyed, or policies unravel, there is almost always a quieter failure upstream:
- Unexamined assumptions stacked on top of each other
- Correlation treated as causation
- Confidence growing faster than evidence
- Risks rhetorically minimised rather than analytically addressed
- Conclusions that feel “obvious” without being logically secured
These failures are rarely malicious. They are structural. And they recur across sectors.
Investment committees approve deals that later implode. Governments adopt policies that produce perverse outcomes. Legal strategies proceed on fragile causal claims. Corporate boards sign off on initiatives that were never logically sound to begin with.
In almost every case, the failure was already present in the document.
The Gap
We Audit Everything Except Reasoning
Modern institutions are saturated with review mechanisms — financial audits, legal compliance, cybersecurity assessments, ESG frameworks, risk registers, and verification.
Yet there is no standard tool that audits the logic of a document before it becomes a decision.
What institutions audit
- Whether the numbers add up
- Whether claims are legally defensible
- Whether language is acceptable
- Whether process was followed
What they don’t systematically audit
- Whether conclusions follow from premises
- Whether assumptions are explicit, justified, or stacked
- Whether causal claims are demonstrated
- Whether uncertainty is acknowledged or concealed
Implication
Institutions routinely approve decisions that are procedurally compliant yet logically fragile. Validity exists to address that gap.
What Validity Is
Validity is a reasoning-analysis engine that audits the logical structure of high-stakes documents before they become decisions.
What it is / isn’t
Validity does not fact-check claims. It does not optimise language. It does not replace human judgment. It maps the reasoning inside a document and identifies structural failures — assumptions treated as facts, causal leaps without mechanism, selective evidence, and risk buried in confident language.
Why This Is Possible Now
Large language models can parse complex documents and identify reasoning patterns at scale. What previously required trained analysts reviewing documents line-by-line can be systematised.
More importantly, institutions are recognising that process compliance does not guarantee reasoning quality. The appetite for epistemic infrastructure is growing.
Why Now
Three forces converge to make reasoning infrastructure both possible and necessary:
1. AI makes systematic analysis feasible
Until recently, auditing reasoning quality required expensive human expertise applied document-by-document. Large language models change the economics. What once required a team of analysts can now be delivered in seconds at negligible marginal cost.
2. Institutions are experiencing reasoning failures at scale
The last decade has produced a consistent pattern: smart people, robust processes, fragile reasoning.
- Investment theses assuming permanence where there was cyclicality
- Policy interventions confusing correlation with mechanism
- Strategic plans built on untested assumptions
3. Accountability is tightening
Boards, regulators, and stakeholders increasingly demand defensible logic, not just procedural compliance. Due diligence is expanding beyond financial and legal review. Epistemic diligence is emerging as the next layer.
Validity is infrastructure for that shift.
How It Works
1
A user uploads an investment memo, policy brief, legal argument, or strategy document.
2
Validity analyses claims, premises, logic chains, and hidden assumptions.
3
It returns a diagnostic report: score, taxonomy, flaw locations, and recommendations.
Interpretation
The output is not a judgment of whether a conclusion is “right” or “wrong.” It is an assessment of whether the conclusion is justified by the reasoning provided.
Product Roadmap
Reasoning diagnostics, fast turnaround, production system
- 8-failure reasoning taxonomy validated across investment, policy, and legal documents
- Sub-10 second analysis turnaround
- Reasoning score + diagnostic report
- Live production system
Integrations, collaboration, and deployment options
- API integration with existing workflows
- Custom taxonomies for sector-specific reasoning patterns
- Team collaboration: shared analyses, comments, version tracking
- White-label deployment for consulting and advisory practices
Live verification during drafting and longitudinal insights
- Browser extension for live reasoning verification as documents are drafted
- Integrations with writing tools (Google Docs, Notion, Confluence)
- Reasoning metrics embedded in organisational dashboards
- Historical pattern analysis over time, by team and document type
Go-to-Market
- Year 1: Design partners (investment firms, policy units, legal compliance teams). Target 5–10.
- Year 2: Wedge expansion. Prove ROI in investment, expand into policy and legal. Target $2M ARR.
- Year 3: Platform. Enterprise deals, partnerships, and category leadership.
Market Opportunity
Market Structure
Validity adds a missing layer at the intersection of decision software, professional advisory, and compliance/risk. We are not displacing existing markets. We are extending them.
Initial Wedge: Investment
- Urgent downside: A single flawed thesis can cost millions.
- Clear ROI: Preventing one bad allocation justifies years of subscription.
- Fast cycles: Decision-makers recognise the problem immediately.
- Concentrated buyers: Partners are accessible; deals close in 30–60 days.
Unit Economics (Early)
ACV
$50K
Annual contract value
CAC
$8K
Direct sales + referrals
LTV
$180K
36-month retention
Gross Margin
85%+
Software economics
Capital Raise
Seed Round: $2M
Use of funds: enterprise-grade product, design-partner conversion, and an 18-month runway through Series A milestones.
Use of Funds
- Product: infrastructure, API, security/compliance, performance and accuracy improvements.
- Sales & Marketing: design-partner conversion, case studies, repeatable pipeline.
- Operations: legal, finance, compliance, administrative runway.
Milestones
- Q1 2026: 10 design partners operational
- Q2 2026: first paying customers, case studies published
- Q4 2026: $2M ARR, validated unit economics, roadmap confirmed
- Q1 2027: Series A position with product–market fit proven
Closing
Reasoning verification is not a “nice-to-have.” It is institutional infrastructure in an era where process compliance no longer guarantees quality. Validity makes reasoning quality auditable, systematic, and scalable — before decisions are locked in.