The Story of Validate: From Ponzi Scheme Investigation to Financial Intelligence Pioneer

Great companies often emerge from unexpected places. For Validate, it began with what would become “Seattle’s largest ever Ponzi scheme, in fact, the largest ever Ponzi scheme in the Pacific Northwest.” In a recent episode of Category Visionaries, founder Chris McCall shared how this notorious fraud case sparked the creation of a platform that’s now transforming professional services.

The story starts with Chris’s co-founder, a CPA who found himself investigating a case where the perpetrator “had raised over $300 million and spent about half of it on boats and houses and yachts, rather than investing it on behalf of the investors.” Over 18 months, the investigation team painstakingly traced the money trail, with experts billing at $500 per hour as they pieced together evidence from banking records and documents.

When his co-founder approached him with the idea of building software to streamline this process, Chris was initially skeptical. Coming from the enterprise software world, he dismissed it as “the $2 million spreadsheet,” questioning its market potential: “How many Ponzi schemes are there? How do you sell it? How do you replicate?”

But the idea wouldn’t go away. During annual ski trips, the two friends continued to debate and refine the concept. The breakthrough came when they realized they weren’t just solving for fraud investigations – they were addressing a fundamental challenge in professional services: “We’re doing the same thing that you do in any sort of financial statement audit or any sort of engagement where you have a professional involved in a complex financial matter… everyone has to base their opinion on evidence.”

This realization led to an even bigger insight: “The entire accounting profession is based on this sample risk. If we can just go make a platform to collect and aggregate all the evidence, we can drive sample risk out of the accounting profession.” Suddenly, what seemed like a niche solution for fraud investigations revealed itself as a platform that could transform entire industries.

Building the platform wasn’t a sprint – it was a marathon. It took two and a half years before they acquired their first paying customer. As Chris explains, “The stack that we had to build was pretty extensive, and then selling to accountants and lawyers is pretty difficult. The difficulty being there’s not a lot of early adopters.”

But when the platform finally launched, the response validated their patient approach. “Word of mouth happens really fast,” Chris notes. “There wasn’t a lot of time delay between that first purchase and really scaling up to the first million dollars.”

Today, Validate operates across multiple professional sectors. They began in accounting, expanded into government work, and are now gaining traction in legal services. Each market has presented unique challenges – government sales require “patience, and you got to make very large investments in compliance,” while the legal market offers diverse opportunities without a clear “rinse and repeat motion yet.”

The company maintains disciplined growth, targeting “60 to 120% year on year growth.” This measured approach reflects their understanding that building for professional services requires a different playbook than typical enterprise software companies.

Looking to the future, Validate’s vision extends far beyond their current success. As Chris explains, “If we can drive out sample risk and give these professionals way more transparency by providing all the evidence in these large, complex financial matters, ultimately that drives down the cost of capital and makes the whole financial system more efficient.”

This vision – of bringing unprecedented transparency to financial systems – showcases how far Validate has come from its origins in fraud investigation. What started as a solution to make complex investigations more efficient has evolved into a platform with the potential to transform how professional services operate at a fundamental level.

It’s a reminder that sometimes the best business ideas don’t emerge from searching for the next big thing, but from deeply understanding a specific problem and recognizing its broader implications. For Validate, a single Ponzi scheme investigation revealed a path to revolutionizing how professionals handle complex financial matters – proving that transformative ideas can indeed come from the most unexpected places.