AI due diligence: check startup revenue without mixing sales and cash

Fix the claim before you ask AI to check it

Due diligence means checks before you invest. A pitch may call signed orders, paid bills or earned sales revenue. Revenue is sales counted under the firm's accounting rules. Ask the founder which meaning they use. Do not compare two totals until they share a clear basis.

Start with the exact claim from the pitch. Write down the firm, buyer, date range, currency and unit. USD in thousands is not USD in whole dollars. State whether the figure is actual sales or a future plan. Keep the pitch file and its date so a later edit does not erase the first claim.

Build one review row for that claim. Add the source file, page or row, amount and next open question. Keep the founder's figure next to your checked figure. A gap is not proof of fraud. It may be a date, tax, scope or data-entry issue. Ask for the cause before you judge it.

• Claim: the exact words and number shown in the pitch.
• Basis: legal firm, buyer, dates, currency, units and sales rule.
• Evidence: file ID, version and page or row for each amount.
• Status: supported within scope, open or not supported; name the reviewer.

Use four evidence views, not one grand total

The signed deal shows what the parties agreed. Read its dates, prices, changes and exit terms. It does not prove that work was done or cash arrived. A bill asks for payment. It may cover work already done or work still due. Keep each bill's ID and any later change to it.

A cash receipt can help show a buyer paid. Check the payer, date and amount against the bill. Bank cash may be net of fees or cover several bills. A payment may also be a loan, share funding or a refund. Do not count all cash that enters the firm as sales.

The books show when sales were counted. Under IFRS 15, sales reflect goods or services passed to the buyer. A promise in the deal may be met at once or over time. The chosen rules and facts matter. Ask the finance lead to explain the earned-sales schedule. This rule applies to firms using IFRS 15, not every startup worldwide. [1]

• Deal: what was promised, to whom, for what price and dates.
• Bill: what was charged, including credits or cancelled bills.
• Cash: what was received and which bill it can be linked to.
• Books: what was earned in the chosen period and why.

Test one paid year against three months of service

This case is made up, not a real firm's results. A buyer pays USD 12,000 on 1 January for a year of software use. The year ends on 31 December. Assume the same service each month. There are no taxes, fees, refunds or extra setup work. The finance lead checks the example's accrual rules. Under these rules, sales count as service is supplied. The cash date alone does not set earned sales.

The monthly earned amount is USD 12,000 ÷ 12 = USD 1,000. By 31 March, three months were supplied. Earned sales for January to March are USD 3,000. Cash received was USD 12,000. The remaining USD 9,000 is deferred revenue at that date: cash received for service still owed. Stripe explains why upfront cash and earned sales can differ. [2]

Do not add the deal, bill, cash and earned amount together. They describe the same sale at different points. Nor should you divide every deal by twelve. Bundled work, usage charges or changes in terms can change the timing. Ask an accountant to apply the right rules to the real facts. The example is not a tax or accounting opinion.

• Signed annual deal: USD 12,000, not proof of three months of earned sales.
• Bill and cash received in January: USD 12,000 each; do not count twice.
• Earned sales for January to March: USD 3,000 in this example.
• Service still owed at 31 March: USD 9,000 in deferred revenue.

Ask AI to extract evidence, not decide the accounts

Give the tool only files you may share. Use your approved private review space. Hide data that is not needed, but keep enough to trace the trade. Agree on who may view the files and when copies must be deleted. Never put bank logins or full account credentials in a prompt.

Ask for each amount as written, its unit, date and source location. Ask the tool to leave missing fields blank and list them. Keep extracted text apart from any guess. For a scan, check the page by eye. A lost minus sign or a misread date can change the view of a deal.

NIST's AI risk guide is voluntary, not a law. It calls for checks of output and sources. Fluent text can still be wrong. Open each cited file used for a key claim. Use a spreadsheet or code to check totals. Do not rely on a second AI answer. A cited copy from a founder may not be genuine. When a key claim needs more proof, agree on a safe way to check the source. [3]

• Extract exact amounts and locations; do not merge evidence types.
• Flag gaps, credits, refunds, fees and date-range mismatches.
• Keep the source text and the tool's proposed explanation separate.
• Do not let the tool change the books or approve a deal.

Resolve gaps without forcing the numbers to match

Ask the finance lead to show how each total was built. Keep refunds, tax, fees, currencies and payment dates clear. A credit reduces a bill; it is not a new sale. One receipt may pay several bills. A bill may be paid in parts. Match the links without counting the same amount twice.

An earned sale may be in the books before it is paid. Upfront cash may pay for service still owed. An annual run-rate projects a full year from current sales. It is not cash or a full year of actual sales. Keep each view on its own basis. One metric must not fill gaps in another. [1] [2]

If the pitch used the wrong label, ask for a clear fix. Keep the old claim, new figure, cause and sign-off date. Hold a key part of the review if its gap stays open. Missing proof is not zero or confirmed sales. Nor is it proof of fraud. Seek qualified local advice on complex rules or disputed contract terms.

Show what you checked and what remains open

For a pre-seed firm with no sales, say no sales were claimed. Review tests and buyer intent as their own evidence. At seed, trace paid pilots and early repeat sales. At Series A, test a broader sales base and its timing. The sample should fit the claim, stage and risk. A few checked bills do not prove the whole sales total.

Agree on the sample before the result is known. Include large items and unusual timing, not just neat paid bills. Record how much of the claimed total was checked. State what was left out and why. A person should sign the note, name the unresolved points and set the next step.

Use the note to decide what needs a deeper check. It is not an audit, proof of future growth or a reason to invest on its own. Laws and accounting rules differ by place and firm. Seek local legal, tax and accounting advice for your case. A first meeting is not a promise of funds or returns.

• Keep one dated claim record and links to the evidence.
• State the sample, its coverage and limits, with a named reviewer.
• Preserve corrections and open questions rather than hiding gaps.
• Set the next source check; do not treat an AI summary as full review.