In this edition of Eqvista’s founder spotlight, we spoke with Collin Sebastian, the founder of En Vérité AI, about how AI-driven diligence is changing early-stage venture capital, especially as many are frustrated with mega-fund practices. Drawing on his experience as a serial entrepreneur, angel investor, LP, GP, and former capital allocator, Collin shares insights on common red flags like messy cap tables, stacked SAFEs, and poor OPEX forecasting. He also points out that 81% of pre-seed startups are already generating revenue (with run rates between 80k and 130k), and that emerging managers are outperforming mega-funds in DPI and MOIC. Collin talks about hype-driven valuations, explains how En Vérité is making thorough underwriting more accessible for family offices, and shares his vision for a healthier, more transparent ecosystem.
En Vérité AI addresses a critical challenge, with most founders failing due diligence on their first attempt. What drove you to found En Verite in 2024, after years navigating frustrations in early-stage investing?
As a former GP, I grew really frustrated at how mega-funds are eroding the culture of venture capital. We’ve incentivized a lot of bad behaviors in founders and created an environment where narrative drives valuation more than performance. That introduces unnecessary risk into the asset class and, more importantly, sets founders up to fail. It starts with diligence, which for most VCs has become inconsistent or superficial, so decisions are being made without a real understanding of the underlying business. VCs used to be focused on setting every founder up for success. Today, many mega-funds openly admit that what they really care about is fee generation and scalability of check size. That means they’re structurally fine with 29 out of every 30 founders failing because they only need a small number of IPOs to return the fund.
We created En Verite AI to help democratize venture capital for the investors who actually make a difference in the lives of their founders. Emerging managers and family offices are increasingly filling that role. They want to back the best founders, but they also want the confidence that every deal they look at has been properly underwritten and that they understand the risks going in.
You’ve been on all sides of this ecosystem — serial entrepreneur, angel investor, LP, and capital allocator at a large multinational VC fund. How does that 360-degree perspective shape how you built En Vérité, and do you think most due diligence tools miss something because they’re built by people with only one of those vantage points?
I built the platform I wish I had when I was a capital allocator and the one I wish I had as an operator, because diligence is both critical and difficult for both sides. Family Offices and emerging managers need quality deal flow, thorough diligence, and smart deal structure to prevent early-stage VC from becoming a spin of the roulette wheel. To founders, diligence is often a black box they’re either told to take seriously or blind-sided by. They need more transparency into the process in the same way that investors need more transparency into potential portfolio companies.
En Verite solves this. We help founders diligence themselves to better prepare for their raise, and perhaps more importantly, to better run their businesses, while we perform diligence at a speed and thoroughness that helps investors both de-risk the asset class while maintaining pace with the hottest deals.
Your platform sees deal flow across investors of all sizes. What actually separates the smaller funds that consistently find great companies from those that are struggling?
As a GP of an emerging fund, you have to spend all your time searching for founders and LPs. That leaves little-to-no time for diligence, which means you can’t underwrite your own deals, and can’t lead them. This means the GP is either skipping diligence and gambling, or they’re trapped simply following on and letting the mega-funds control the market.
The top performing emerging managers aren’t investing on instinct; we can see across the top decile managers on our platform that they’re ignoring the matchmaking platforms that are spamming them with hundreds of companies a month. Instead, they’re sourcing top founders through relationships and in-person networking, and investing earlier in the cycle – pre-revenue, pre-MVP. But they’re not looking for slick decks and sales pitches from charismatic charmers; they’re looking for startups with strong founder-market-fit and leaders who really understand the unit economics of their businesses. They place more emphasis on financial models from a COGS and OPEX perspective, even if revenue growth is still a bit of a guess.
In short, they’re looking for strong operators with entrepreneurial instincts, whereas many funds still confuse “conviction” with likeability.
En Vérité covers financial, legal, operational, commercial, governance, and HR diligence on one platform. When your AI is analyzing a startup’s financials or cap table, how does it benchmark what it finds — is it drawing on historical deal data, sector norms, or something else entirely?
An investor can upload a data room and, within hours, receive a structured breakdown across financials, cap table integrity, governance risks, and operating assumptions, along with flagged issues and benchmarking against similar companies.
We’ve now had close to 60,000 startups come through our platform, and we have a unique data set that runs longitudinally across multiple rounds. While we don’t use company-specific data in our neural network, we understand the profile of companies in each segment that are most likely to drive successful (and unsuccessful) outcomes. When combined with forward-looking trends in the market, historical norms, and current events, we’re able to give investors a true 360 degree perspective of the company. Our goal is not to give recommendations about whether to invest in a startup or not, but to give investors a better sense of the tradeoffs that come with each investment, and the strengths and weaknesses of each company. Better informed investors are better aligned investors, and better educated investors can be much more helpful than those giving advice purely based on their intuition.
Early-stage failures often stem from sloppy cap tables or unreconciled financials. What’s the most challenging due diligence failure you’ve encountered and resolved with En Vérité AI?
No data room is perfect. Not even ours. One of the most beneficial things we do for founders is tell them how their data rooms are falling short; pointing out issues with their financial models, cap tables, income statements, etc., so they can fix them before investors dive in. Many times, the issues they need to address only require a few hours of help from a good accountant, but it’s always amazing how much credibility an investor gives a founder who really understands their numbers.
The challenging ones are actually times when we’ve caught founders engaging in inappropriate spending; we’ve seen founders renting luxury apartments for themselves and claiming it as office space, buying themselves Tesla’s with their Seed rounds, or giving their girlfriends large equity grants for no business reason. Thankfully, investors on our platform pass, but I can think of a half dozen examples where these companies have gotten funded by larger funds only to issue their closure notices 9 months later.
Cybersecurity risk has moved from a nice-to-have to a real diligence concern, especially as regulatory pressure on VCs increases. How is En Vérité incorporating security and compliance risk into its workflows, and is that something investors are actively asking for?
I and most of my colleagues actually have cybersecurity backgrounds, so it’s somewhat part of the fabric of our culture and engineering philosophy. We built for SOC-II and NIST even before we ever thought about getting certified, but the most important thing about us is something that no other competitor can say: we are not an LLM wrapper. The problem with LLM-based solutions is that, no matter what the startup says, at some point, they are passing customer data onto a third-party model. The data our customers send us stays in our environment.
This is something we get asked a lot by Corporate Venture Capital funds who need their vendors to pass Fortune 500 IT Sec standards, and we get frequent feedback that we’re the only ones in the space who can.
Beyond the usual suspects —sloppy financials, founder conflicts, IP gaps — what are the top diligence red flags you’re seeing most frequently in 2025 and into 2026, and are any of them surprising?
First, awful financial models. It’s true that predicting revenue early-stage can be hard if not impossible, but forecasting COGS and OPEX is absolutely doable. The number of founders we see who have put almost no thought into what their costs will be would astonish you, and almost none of them get funded. Showing an investor how you intend to deploy their investment is something that can instantly set a founder apart and establish their credibility with mature VCs.
Second, stacked SAFEs and Convertibles; we see a lot of founders who have put SAFE on SAFE with valuation caps all over the map, and they have no idea what they will own if the company ever does a priced round. Unfortunately, we also rarely see these companies get to a priced round. An interesting note: we’re seeing a ton of CAPEX-intensive companies (hardware, robotics, etc.) raise on Convertible Notes, but stacking them like SAFEs. Investors are constantly missing this, and it’s incredibly dangerous. We actually had to train our AI to analyze this specific scenario because it was so problematic – imagine being a SAFE investor in a company who has raised $6M in convertible debt. You have three main things to consider: variable interest rates from note-to-note which detracts from operating capital.
The VC secondary market is heating up and M&A activity is rebounding. Are you seeing early-stage investors start to factor exit pathways and liquidity scenarios into their seed- stage decisions differently than they were two or three years ago?
Yes, absolutely. I’m not a big fan of secondaries – it starts feeling Ponzi-schemish very quickly when you see funds marking up their fees on secondaries to 5-8%, which is fairly common now, unfortunately. Secondaries are really a forcing function of being locked into a 10-year horizon, a problem for LPs which is only being compounded by the mega- funds who are focusing on scalability of check size. These massive funds are now de- prioritizing M&A at the expense of win rates and liquidity.
What’s interesting is that we see more and more Series Seed and A companies being acquired, which represents a huge opportunity for family offices, angel investors, and emerging managers to get smart about portfolio construction without becoming dependent on secondary transactions for liquidity; in fact, if you know what to look for and how to underwrite properly, some deals that are clearly not unicorns are actually great for creating liquidity events in the 2, 4, and 6 year marks of a portfolio.
The mega- funds overlook these and it’s a great opportunity for other capital allocators to reap that Alpha.
En Vérité sits at the intersection of thousands of early-stage deals, which gives you a data view that most people — including the mega-funds — simply don’t have. What’s the most surprising thing your platform data is telling you about the state of early-stage VC right now that isn’t making headlines?
The top decile of family offices is outperforming the mega-funds with respect to DPI and MOIC, and the top decile of emerging managers are outperforming those family offices –meaning if you’re still an LP at a mega-fund, you probably ought to reconsider your position.
Also, in the age of AI-drive development, a staggering 81% of Pre-Seed startups that have come through En Verite are generating some form of revenue before their Pre-Seed raise (a One-Sigma interval between $80-130k run rate), as are 94% of Seed startups (a One-Sigma interval between $680-820k run rate). That’s a 12-month average, but if you isolate quarter-over-quarter, the average early-stage revenues are increasing.
Finally, the average rounds, as you might expect, are also increasing; Pre-Seeds are averaging about $1.2M and Seeds are at about $4.3M.
Basically, startups are getting to market faster and proving PMF earlier, which is great for family offices and angels, as it helps to de-risk the asset class.
You’ve mentioned that the startup hype cycle is destructive to real entrepreneurs. What does a healthier early-stage ecosystem actually look like — and is En Vérité part of fixing It?
Hype cycles create an enormous amount of valuation overhang which leads to two things: more down rounds and recaps that crush founders and early investors; and more perceived risk in the asset class which stalls investment.
Mega-funds are raising so much money on their management fees that their carry has become almost irrelevant to their lifestyles. They chase book value because it helps them raise gargantuan funds from sovereign wealth and pensions, while the typical $1-5M LP gets overexposed. The awful thing about that is: when book value as a marketing asset matters more than real returned value as a performance metric, valuations become justified by narrative, not by business fundamentals.
This isn’t how it used to be, and I think it’s evidence that the 2 & 20 model just doesn’t scale beyond a certain AUM.
What we’re trying to do is bring some sanity and discipline back to early-stage VC. It’s hard enough being a founder without having completely unrealistic expectations set on you – I’ve literally had a founder tell me that a VC told him to redo his forecast because the VC “said he didn’t need it to be probable, he just needed it to be plausible”. Mega- funds have incentivized some pretty bad behavior in early-stage founders and created an environment where exaggeration and obfuscation are the norm.
A healthy VC ecosystem is one that’s driven by first principles and business fundamentals, not by hype and narrative. But we can only get there by creating opportunities for investors to have real conversations with founders about the tough parts of building a business. Great relationships produce great outcomes. And those relationships are built on trust, which comes from transparency. Diligence is what creates that transparency in venture.
We’re not trying to change venture capital through opinion. We’re doing it by making rigorous diligence faster, more accessible, and harder to ignore. Over time, that shifts behavior. And behavior is what shapes outcomes.
