Startup Vetting Process
How NYYU evaluates and screens startup opportunities for investor protection
How Does NYYU Vet Startups?
Understand our comprehensive multi-stage vetting process that protects investor interests and maintains platform quality
Quick Answer
NYYU employs a rigorous multi-stage vetting process including KYC/AML verification, background checks on all officers and directors, regulatory compliance review (SEC filings, licenses), business due diligence, and financial analysis. We accept most startup types except those in unethical industries (military applications, pornography). Only startups that pass all stages are listed on our platform.
Our Vetting Philosophy
Every vetting measure is designed to protect investors from fraud, misrepresentation, and unqualified opportunities.
We maintain the highest standards of compliance with SEC regulations and securities laws across all jurisdictions.
We maintain selective standards, listing only startups that meet our comprehensive criteria for viability and integrity.
The 6-Stage Vetting Process
Stage 1: Initial Screening & Eligibility
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First, we verify that the startup operates in an acceptable industry sector.
- • Technology & Software
- • Healthcare & Biotech
- • FinTech & Financial Services
- • E-commerce & Retail
- • Clean Energy & Sustainability
- • Education & EdTech
- • Real Estate & PropTech
- • Consumer Products
- • And most other legitimate sectors
- • Military weapons & applications
- • Adult entertainment & pornography
- • Illegal or unregulated substances
- • Gambling (in restricted jurisdictions)
- • Pyramid schemes or MLM
- • Other unethical or harmful industries
Stage 2: KYC & AML Compliance
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All startups must complete comprehensive KYC (Know Your Customer) and AML (Anti-Money Laundering) verification.
📋 Company Documentation
Articles of incorporation, bylaws, cap table, and ownership structure
🆔 Identity Verification
Government-issued IDs for all founders, officers, and directors
🏦 Financial Verification
Bank account verification and source of funds documentation
⚖️ AML Screening
Checks against sanctions lists, PEP databases, and watchlists
We work with leading KYC/AML providers to ensure thorough verification and compliance with global standards.
Stage 3: Background Checks
3
Comprehensive background checks are conducted on all key personnel.
Stage 4: Regulatory Compliance Review
4
Ensure all necessary licenses, approvals, and regulatory filings are in place.
Securities Registration
Startups must have proper securities filings with the SEC:
- Regulation CF (Crowdfunding): For offerings up to $5M annually
- Regulation D (506b/506c): For accredited investor offerings
- Regulation A+ (Tier 1/2): For offerings up to $75M annually
- Other applicable exemptions: Based on offering structure
We verify that all Form C, Form D, or offering circular filings are complete, accurate, and approved by regulators.
Required Licensing
Industry-specific licenses and permits are verified:
- Business licenses in operating jurisdictions
- Industry-specific permits (e.g., FDA for medical devices)
- Professional licenses (e.g., banking, legal, healthcare)
- Intellectual property registrations (patents, trademarks)
All licenses must be current and in good standing.
Cross-Border Compliance
For international startups, we verify compliance with:
- Local securities laws in country of incorporation
- Cross-border offering regulations
- Tax compliance and reporting requirements
- Data protection laws (GDPR, etc.)
Stage 5: Business Due Diligence
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Thorough evaluation of business model, market opportunity, and competitive position.
- • Total addressable market (TAM) validation
- • Competitive landscape assessment
- • Market trends and growth potential
- • Customer validation and traction
- • Product-market fit evidence
- • Technology/IP differentiation
- • Development stage and roadmap
- • Scalability and defensibility
- • Founder/team experience and expertise
- • Domain knowledge and capabilities
- • Advisory board and investor quality
- • Organizational structure and culture
- • Revenue model and monetization
- • Customer acquisition strategy
- • Unit economics and profitability path
- • Partnerships and go-to-market plan
Stage 6: Financial Analysis
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Deep dive into financial health, projections, and funding requirements.
We review historical and projected financials including:
- • Previous funding rounds and valuation history
- • Current cap table and ownership structure
- • Burn rate and runway calculations
- • Use of funds plan for current raise
- • Future funding requirements and timeline
- • Valuation methodology review
- • Comparable company analysis
- • Stage-appropriate pricing assessment
- • Terms fairness evaluation
Final Approval & Listing
After completing all six stages, the startup application is reviewed by our internal approval committee, which includes:
Only startups that receive unanimous approval from all committee members are listed on the NYYU platform. Our rejection rate exceeds 70% of applications.
Ongoing Monitoring
Our vetting doesn't stop at listing. We continuously monitor all listed startups:
Track key metrics, milestones, and progress against stated goals
Regular checks to ensure ongoing regulatory compliance
Ensure startups provide timely updates and respond to investor inquiries
Alert investors to significant events, pivots, or risk factors
Why Our Vetting Matters
Our comprehensive background checks and identity verification protect investors from fraudulent schemes and bad actors.
Ensuring SEC compliance protects both startups and investors from legal issues and regulatory penalties.
Business due diligence helps filter for startups with genuine potential rather than just ideas without execution.
Knowing every startup has passed rigorous vetting gives investors confidence to make informed decisions.
Related FAQs
Step-by-step guide to investing in vetted startups on NYYU
Learn about risks and how our vetting process mitigates them
Understand minimum thresholds for vetted opportunities
Monitor your investments in vetted startups
Still Need Help?
Our team can provide more details about how we evaluate startups and maintain platform quality. We're committed to transparency in our due diligence process.
Keywords: startup vetting, due diligence, KYC AML, background checks, SEC compliance, startup screening, investor protection, regulatory compliance, quality assurance