I’m not a valuation expert.
I didn’t come from venture capital background.
I’m not an investor.
I am very much a founder and creator of new successful businesses.
Until recently, I didn’t realise how much confusion sits behind words like validation, risk, and confidence in early-stage decisions.
What I have seen — again and again — is how important decisions are made with incomplete or misleading information and then justified after the fact based on the information presented at the time.
Working alongside Sir Ray Avery, and listening to how experienced decision-makers think about responsibility, uncertainty, and evidence, forced me to slow down and ask a more basic question:
What do we actually mean when we say something is “validated”?
This article is my attempt to answer that — not from the position of an expert defending a method, but from the position of someone trying to remove confusion before it hardens into habit. It sets out what VC VALIDATE means by validation, what it explicitly does not mean, and why drawing that boundary matters far more than choosing the right model or number.
This article is not a how-to guide. It exists to set language, boundaries, and expectations — so that more detailed tools and processes make sense later.
Let’s start with terminology
The word validation is widely used in the VC startup process
But from a scientific perspective it means what can be proven and is true
In early-stage investment, innovation, and commercial decision-making, the term validation is routinely used alongside other metrics including
- confidence,
- traction,
- plausibility,
- or — most commonly — valuation.
These inputs are not validation but unvalidated information.
VC VALIDATE was created to defining validation precisely — and by drawing a hard boundary around what it does not mean.
This article is about identifying that boundary.
Why “validation” became ambiguous
Imagine a typical early-stage VC capital raise decision making meeting.
The technology isn’t finished. The market isn’t proven. The data is incomplete.
Someone asks: “So… is this validated enough to proceed?”
What usually follows is not a clear answer, but a mix of confidence, numbers, experience, and pressure — all standing in for something that hasn’t been defined.
In most early-stage contexts, decisions are made before truth is available.
Technology is unfinished.
Markets are theoretical
Regulatory paths are uncertain.
Evidence is partial, staged, or indirect.
Under those conditions, decision-makers still need to act.
Over time, validation became a catch-all word for:
- reassurance,
- momentum,
- or signals that “this feels real enough to proceed”.
The problem is not that these signals exist.
The problem is that they are often presented as something else, science based validation.
What VC VALIDATE means by validation
In VC VALIDATE, validation is not confidence.
It is not consensus.
It is not plausibility.
For us Validation is the disciplined clarification of what is known and can be proven and what is assumed, and what remains unresolved at the moment a decision is required to be made
That definition is deliberately specific.
Validation answers one question only:
Is this decision justified, given the current balance of evidence and uncertainty?
It does not answer:
- whether the enterprise will succeed or fail.
- whether the opportunity is a good investment.
- or whether capital should ultimately be committed.
Those are separate questions for others to answer as part of the VC investors DD.
Validation requires scientific scrutiny before commitment
In early-stage VC investment decisions, waiting for certainty is rarely possible. Decisions are made while the picture is still forming.
VC VALIDATE defines validation as the practice of applying evidence-based considerations alongside disciplined common sense at that point: spelling out assumptions, exploring what-if scenarios that are often skipped, and asking whether the decision still holds if reality unfolds differently than hoped.
This is not about forecasting outcomes or defending results later. It is about applying the cumulative knowledge and thinking more carefully before committing — stress-testing the decision against realistic conditions, constraints, and failure paths that experienced operators know exist, even when they are uncomfortable to name.
Validation, in this sense, governs the quality of evidence and thinking at the time of decision, not performance measured in hindsight.
What validation consists of (positively defined)
In practice, validation under VC VALIDATE is not complicated, yet is profoundly valuable. It asks five core questions — about individual claims, evidence, risks, decisions, and traceability, which make sense, but that are surprisingly often skipped.
Under the VC VALIDATE system, validation requires five things:
- Explicit verifiable claims
If a claim cannot be scientifically proven by an independent third party or peer reviewed scientific research, then it cannot be validated.
- Evidence classification
Evidence is identified, contextualised, and classified relative to the possible adverse risk outcomes
Validation is both qualitative and quantitative ,accuracy and precision based
- Separation of risk domains
Technical, regulatory, manufacturing, supply chain, and adoption risks are treated independently.
No domain may compensate for another.
- Explicit decision making
Every validated process ends in one of three outcomes:
- Proceed
- Defer with conditions
- Reject
Ambiguity is not an outcome.
- Auditability
A third party must be able to reconstruct:
- what was relied upon,
- what was assumed,
- and why the decision was taken.
If a decision cannot be reconstructed later, it was not validated.
What validation is not
This is where confusion usually arises.
Validation is not valuation
Valuation produces numbers.
Validation governs whether producing numbers is legitimate.
A valuation can exist without validation — and often does.
But it should not.
VC VALIDATE does not perform valuation and does not issue valuation opinions. Where valuation is required, it must be conducted by appropriately qualified and independent professionals, subject to the admissibility conditions defined by the VC Validate process.
This boundary is intentional.
Validation is not prediction
Validation does not estimate likelihoods for outcomes that cannot yet be grounded.
When uncertainty is epistemic — not merely commercial — assigning probabilities creates false precision.
Validation makes uncertainty visible and explicit., prediction – forecasts hide VC it.
Validation is not due diligence
Due diligence aggregates information.
Validation classifies its relevance and limits.
A large volume of information does not imply validation.
VC Validation is not endorsement
VC Validation does not approve or recommend VC investments.
It does not “green-light” teams or technologies.
It governs whether a decision is responsibly justified — nothing more.
In early-stage VC investment decisions, waiting for certainty is rarely possible. Decisions are made while the picture is still forming.
VC VALIDATE defines validation as the practice of applying evidence-based considerations alongside disciplined common sense at that point: spelling out assumptions, exploring what-if scenarios that are often skipped, and asking whether the decision still holds if reality unfolds differently than hoped.
This is not about forecasting outcomes or defending results later. It is about applying the cumulative knowledge and thinking more carefully before committing — stress-testing the decision against realistic conditions, constraints, and failure paths that experienced operators know exist, even when they are uncomfortable to name.
Validation, in this sense, governs the quality of evidence and thinking at the time of decision, not performance measured in hindsight.
Why valuation so often replaces validation
Exploring the subject of validation, I discovered that valuation is frequently used as a substitute for validation because it performs a social function:
- it stabilises discussion,
- anchors disagreement,
- and creates a sense of resolution.
A specific number of unvalidated endorsements from qualified person feels like progress.
The problem is that valuation silently assumes:
- uncertainty can be repurposed and ignored
- unrealistic probabilities can be assigned,
- and unknowns are subordinate to assumptions.
When those assumptions are false, valuation degrades decision quality instead of improving it.
VC VALIDATE exists precisely to prevent that substitution error.
The VC VALIDATE position on valuation (by exclusion)
VC VALIDATE does not ask:
“What is this worth?”
It asks:
“Is valuation can be done at this stage, given the state of validated evidence?”
Sometimes the answer is no.
In those cases, deferral is not indecision.
It is the only decision that preserves integrity.
Why this distinction matters institutionally
For boards and committees:
- Validation creates defensible decisions without pretending certainty.
For investors:
- Validation prevents premature commitment disguised as analysis.
For founders:
- Validation turns rejection into intelligible feedback instead of opaque numbers.
Most importantly, validation claims it’s place upstream, before capital, reputation, or public trust is committed.
What VC VALIDATE explicitly excludes
To remove any remaining ambiguity:
VC VALIDATE does not:
- price companies,
- select valuation models,
- optimise financial outcomes,
- or replace regulated valuation professionals.
It governs the conditions under which decisions — including valuation and investment decisions — can be considered.
That is its entire role.
Why this definition is deliberately narrow
A broad definition would be easier to sell.
A narrow definition is harder to misuse.
VC VALIDATE chooses the latter.
Final clarification
If a process produces:
- a number without evidence clarity,
- confidence without auditability,
- or resolution without explicit uncertainty,
it may feel decisive — but it cannot be validated.
VC VALIDATE exists to ensure that when decisions are made under uncertainty, they are made consciously, explicitly, and defensibly.
Nothing more.
Nothing less.
P.S. My thanks to Sir Ray Avery for reviewing this article and helping strengthen its clarity and structure.
Assia Salikhova,
Co-Founder, VC VALIDATE
Co-Architect of the VC VALIDATE Validation Assessment System™