Who Verifies the Agents? Jonathan Awad, co-founder and CEO, Baselayer

Summary

What happens when the software spending your money doesn't have an ID? Baselayer co-founder and CEO Jonathan Awad built a company to answer the business version of that question. More than 2,300 financial institutions, roughly one in five in the US, use Baselayer to verify and underwrite the businesses they work with. Those businesses now deploy AI agents to book travel and file applications for them, and the banks on the other side need a way to tell an authorized agent from a bot.

In this episode of The Flywheel, M13 Managing Partner Karl Alomar talks with Jonathan about KYB (know your business), why a bank can take weeks to verify a business it can't see in person, how AI made fraud cheaper, and how agent identity works. Jonathan also shares the family story behind Baselayer: an uncle whose personal guarantee followed a struggling business into his own credit.

Through the conversation, Karl explores why M13 believes verifying AI agents will become core financial infrastructure as agentic commerce grows.

Key insights

Why does it take a bank days to verify a business?

When Meta runs your ads and bills you 30 days later, it has extended you credit. Banks, lenders, marketplaces and suppliers make the same call every time they open an account or offer net-30 terms to a business they can't see in person. At many of the 10,000-plus financial institutions in America, especially community banks and credit unions, that check is still slow and manual. Jonathan says it can take a day or two for a deposit account and stretch to weeks when a bank is lending. A small account needs proof the business is registered and the applicant owns it. Once millions are at stake, the bank may ask about criminal history for the owner, employees, spouse and siblings. As Jonathan puts it, "It's very easy to hand money out. It's very hard to get it back."

How is AI changing business fraud?

Personal data from breaches sells on the dark web for about $20 a file, according to Jonathan. An LLM (large language model) can recombine that data into millions of synthetic identities quickly and cheaply, and the prompts rarely look like fraud to the model. Most scammers were never sophisticated, he says. They looked things up online and kept trying until they got caught. Now everyone has a model in their pocket. Instant settlement through stablecoins and FedNow raises the stakes because it removes chargebacks and refunds, so stolen money is gone.

How do you verify an AI agent?

Baselayer is building for both sides of an agent transaction. Merchants get an SDK that tells them whether a visitor is a bot or an authorized agent. Businesses that deploy agents get a credential carrying the delegation of their verified identity, so the agent is treated as an extension of the business. Jonathan calls the logic a transitive property. If an institution trusts a business, and that business has no history of deploying bad agents, the institution can trust its agent too. Karl expects a single business to run thousands of agents handling contracts as well as payments, which makes that verification critical.

Founder lessons from building business credit infrastructure

Jonathan's parents immigrated to the US, and an uncle started a company when Jonathan was young. Lenders had so little business data to go on that his uncle had to sign a personal guarantee, and when the business struggled, the default hit his personal credit. Experian, Equifax and Dun & Bradstreet built deep consumer infrastructure and paid less attention to small business. The surge in new companies after COVID exposed the gap, and Jonathan and co-founder and CTO Timothy Hyde started Baselayer to build business scoring as mature as the consumer side. He also warns founders that everything in financial services takes 12 to 24 months. Asked what keeps him up at night, he answers with a question: "What conversations are we not in?"

Related topics

What is Baselayer?

Baselayer is a risk and identity infrastructure company that helps financial institutions verify and underwrite businesses and the AI agents they deploy. More than 2,300 financial institutions use Baselayer, and every profile request feeds a shared fraud signal back to the network. In 2026, Baselayer raised a $35 million Series A led by M13. Read why M13 invested in Baselayer.

What is KYB?

KYB (know your business) is the process banks and lenders use to confirm a business is legitimate before they open an account or extend credit. A KYB check confirms the business is registered and identifies who owns and runs it, then adds risk checks that grow with the amount of money involved. KYB is the business counterpart to KYC (know your customer), which verifies individuals.

What is synthetic identity fraud?

Synthetic identity fraud combines real stolen data, such as a name or Social Security number, with invented details to create an identity that passes basic checks. Fraudsters use these identities to open accounts and take out credit. Generative AI makes it faster and cheaper to produce them at scale, and instant payment rails leave less time to catch them.

What is agentic identity?

Agentic identity is a verified credential that ties an AI agent to the person or business that deployed it. It tells a bank or merchant who the agent represents and what it is allowed to do, so the institution can accept the transaction. In agentic commerce, where agents book travel and move money for their owners, that link to a verified identity decides whether institutions will accept the agent at all. Learn how M13 portfolio company OpenFX is moving money across borders in under an hour.