How Discern Is Digitizing One of the Most Manual Areas of Corporate Compliance

Today’s conversation features Raj Patel, founder of Discern, a modern registered agent and entity compliance platform. Raj is a three-time founder who has built companies through multiple technology supercycles and has often chosen to go against the prevailing hype.

Before Discern, Raj built Pilot, the largest modern fiber network in New York City, and later founded MANTL, a fintech infrastructure company that helped banks open accounts digitally and was acquired for $400mm.

His latest company tackles one of the most pervasive and least discussed areas of business compliance in the U.S.: entity compliance. Every company operating across states must maintain a registered agent and file ongoing updates and renewals across a fragmented web of state-by-state portals, formats and deadlines.

The market has been dominated for decades by a pair of incumbents. Discern’s wedge is simple but powerful: digitize the workflows, automate the filings and make compliance dramatically less time consuming without forcing customers to learn a new pricing model or justify a complicated ROI case to the board.

There are strong lessons here for buyers and operators around rip and replace in “boring” categories, pricing for comparability and how to run AI experiments without chasing the cycle of the week.

As always, let us know what you think and please reach out if you have feedback.

- Dave

Enterprise finance and legal teams know the problem: entity compliance is mandatory, but the workflows around it remain deeply manual.

Every company operating across states must maintain registered agents and file ongoing updates across each jurisdiction where it is registered. In practice, that means juggling dozens or hundreds of filings across different state portals, deadlines and submission formats.

Despite being a foundational requirement for businesses, the market is surprisingly large. Registered agent and entity compliance services represent a multi-billion dollar category in the U.S., yet much of the work is still handled through spreadsheets, inboxes and fragmented government portals.

That is where Raj Patel [LinkedIn] and Discern come in. Discern is a modern registered agent and entity compliance platform designed to digitize one of the oldest and most manual areas of corporate compliance. The company has digitized more than 10,000 government filings so businesses can manage compliance workflows directly through software.

The challenge is that this category has been dominated for decades by a pair of incumbents. Discern’s approach is to replace those services while keeping pricing familiar and onboarding simple so companies can switch without disrupting compliance obligations.

In this conversation, Raj covers:

• Why entity compliance becomes exponentially more complex as companies scale across jurisdictions
• How enterprises end up juggling hundreds or thousands of compliance filings each year
• Why most of the market still relies on two providers that are more than 100 years old
• How Discern automates onboarding by pulling entity data from public records
• Why customers often reduce compliance work by a factor of ten after switching
• How Raj evaluates AI tools without chasing technology hype cycles
• Why startups should still hire for first principles thinking in the AI era

If you care about vertical software, replacing entrenched incumbents or building durable companies in overlooked categories, this conversation explores what it takes to modernize compliance without disrupting the systems businesses depend on.

Introduction

Dave Ambrose (00:14)

Great. Raj, thanks so much for doing this. I’m really excited to have you here. Before we get into everything, maybe start by explaining what Discern is, why you decided to start it, and what problem you’re solving for customers.

What Discern Does and Why It Exists

Raj Patel (00:46)

Absolutely. Thanks for having me.

At its simplest, Discern is a registered agent. A registered agent provides compliance services, entity management services and entity compliance services.

This is actually one of the most pervasive areas of business compliance in the United States and around the world. It’s extremely boring but absolutely necessary.

Every entity out there—from Google to Blackstone—needs a registered agent in every jurisdiction where it’s registered. That agent represents the entity locally for compliance purposes.

What Discern does is provide those services across the U.S., but we’ve approached the market differently because it’s historically been a very old and manual area of compliance.

We’ve digitized it.

At this point we’ve digitized over 10,000 different U.S. government filings, allowing our clients to manage entity compliance through software in any jurisdiction digitally. That digitization is really the innovation Discern brings to the market.

Who Buys Discern and What the Product Replaces

Dave Ambrose (01:55)

Walk me through the product experience. Who do you sell to, who typically buys this and how do they onboard?

Raj Patel (02:04)

The buyer typically sits in either the finance function or the legal function, or sometimes both.

About 75% of the time the primary user is in finance, while about 30% of the time it’s legal.

What we’re doing for those teams is automating ongoing compliance.

For example, imagine a business that operates across all 51 U.S. jurisdictions—all states plus Washington D.C. That doesn’t necessarily mean they have offices everywhere. They may simply have enough sales volume in each state that they must register for sales tax or business licenses.

If you’re an e-commerce business doing hundreds of millions in revenue, you could easily be registered across every jurisdiction.

Each of those jurisdictions requires:

• A registered agent

• Compliance filings

• Renewals

Each filing happens:

• On a different website

• With a different form

• On a different schedule

Some must be mailed.

Some require PDFs.

Some are submitted digitally.

So a compliance team is juggling 51 different filings minimum every year.

And many companies have far more complexity than that.

Some of our customers have hundreds or even thousands of entities, with different entity structures:

• Nonprofits

• Professional corporations

• Standard corporations

• LLCs

Each entity type adds another layer of complexity.

So despite being “boring compliance,” it can actually be a very complex operational problem.

The Incumbents Discern Replaces

Dave Ambrose (04:15)

Who’s the typical buyer making the decision?

Raj Patel (04:19)

Usually the CFO, the General Counsel or their teams.

Often it’s a joint decision between finance and legal.

Dave Ambrose (04:28)

And what stack are they using before Discern?

Raj Patel (04:34)

Almost every enterprise uses one of two companies:

• CT Corporation

• CSC

Both are over 100 years old and dominate the enterprise market.

Roughly 60–75% of all entities in the U.S. use one of those two providers.

In enterprise specifically, that number is probably closer to 90%.

It’s essentially an oligopoly market structure.

How Discern Onboards Customers Quickly

Dave Ambrose (04:59)

Walk me through onboarding. If a customer has hundreds or even thousands of entities, it sounds like there could be a lot of manual work just to move systems.

How does onboarding actually work?

Raj Patel (05:42)

Onboarding is actually very simple.

All we need is a list of entity names.

Because entity records are public, we can pull the rest of the data ourselves.

That means customers don’t have to manually input anything.

We’ve had customers with 400 entities sign a contract in the morning and be fully onboarded by the end of the day.

Typically onboarding involves a 20–30 minute call over Zoom or phone.

We’ve built technology that automatically ingests the public data for those entities.

The next step is replacing the registered agent.

That requires filing change-of-agent forms in every jurisdiction.

We automate that too.

Discern:

• Generates the filings

• Signs them

• Submits them

• Pays the fees

All of that is abstracted away from the customer.

So if a company decides to switch, we can have them fully migrated within a day.

The Rip-and-Replace Challenge

Dave Ambrose (07:03)

So when customers move to Discern they’re replacing CT or CSC?

Raj Patel (07:12)

Exactly.

In every situation, we’re replacing an existing provider.

About 90% of the time that provider is CT or CSC.

We don’t usually start with brand-new companies forming their first entities, although we do handle new entity formations for existing customers.

But our core motion is replacing an existing solution.

How Discern Creates ROI

Dave Ambrose (07:38)

Rip-and-replace motions are usually hard in enterprise. What’s the customer reaction when you’re asking them to switch something so foundational?

Raj Patel (07:56)

The key is demonstrating ROI.

Companies already spend money on compliance—it’s a mandatory cost.

Our job is to show that the same spend produces significantly better outcomes with Discern.

There are a few components:

1. Price competitiveness

We’re usually price-competitive or lower than the incumbent.

2. Time savings

Customers typically see compliance time reduced by 10x.

If a team previously spent 100 hours per year, they’re now spending 10 or less.

Some customers were spending 1,000+ hours per year on compliance across hundreds of entities.

3. Increased compliance accuracy

About 80% of customers we onboard are out of compliance somewhere.

We help them become more compliant.

So the value proposition is straightforward:

Same spend → dramatically better efficiency and visibility.

Pricing the Product

Dave Ambrose (09:33)

How do you price the product?

Raj Patel (09:48)

We price exactly the way the industry already prices.

That makes comparison simple.

The entire industry charges an annual fee per entity registration per jurisdiction.

Usually it’s a few hundred dollars per year.

For example:

A Delaware corporation might cost a couple hundred dollars annually for registered agent services.

Discern charges roughly the same.

That makes the decision easy for CFOs or GCs:

• Same spend

• Better automation

• More visibility

• Better compliance

Especially today, when AI tools often require complicated ROI explanations, we wanted to keep pricing simple and comparable.

Discern’s Approach to AI and Machine Learning

Dave Ambrose (11:04)

You deal with massive amounts of documents—PDFs, filings, government records—and you’ve told me before you’ve experimented with frontier models as well as building your own machine learning infrastructure.

How do you evaluate those bets?

Raj Patel (12:20)

It’s definitely challenging.

We approach it through experimentation.

When we encounter a new technical problem, we start with the technologies already in our production stack.

If those tools solve the problem well, we stop there.

If they don’t, we test other tools we’ve experimented with in the past.

If those meet our ROI threshold, we move them back into production.

Over time, this creates a toolkit of technologies we trust.

More broadly, Discern operates in a very specialized and fragmented area of compliance.

When we tested generic AI models, we didn’t see sufficient ROI relative to their cost.

So we invested in building our own specialized machine learning technology.

The key question companies must ask is:

Is the problem you’re solving generic enough for off-the-shelf models or so specialized that you need custom technology?

That’s the fork in the road.

Lessons From the Crypto Supercycle

Dave Ambrose (14:51)

You’ve built multiple companies through different technology cycles. How do you evaluate hype versus real opportunity?

Raj Patel (15:13)

This happened very clearly with my previous company, Mantl.

Mantl built software helping U.S. banks and credit unions open accounts digitally.

We operated from 2016 to 2025.

During that time, blockchain became the technology everyone wanted to talk about.

Every investor and partner asked:

“What is your blockchain strategy?”

But our customers—banks—didn’t care about blockchain.

They cared about outcomes.

Our job was to choose the most efficient technology to deliver those outcomes, not the technology that was fashionable.

Using blockchain would have introduced major regulatory complexity without improving customer outcomes.

It would have been marketing, not product.

So we ignored it.

The same principle applies to AI today.

We use AI only when it improves the outcome for our customers.

If it does, we use it.

If it doesn’t, we don’t.

That’s the entire rule.

Encouraging AI Experimentation Inside the Company

Dave Ambrose (18:17)

How do you structure experimentation internally?

Raj Patel (19:18)

We’re actually doing this right now across both engineering and growth.

Each department leader has the autonomy to try new AI tools.

Within those teams we assign senior individuals to experiment with the tools.

These are experienced people who deeply understand:

• Our systems

• Our workflows

• The quality bar

They test the tools first to evaluate:

• Accuracy

• Efficiency gains

• Reliability

Only after that do we roll the tools out to the rest of the team.

You don’t want someone new using a tool without understanding when the output might be wrong.

So experienced operators test the technology first.

Then we deploy it in stages.

Hiring in the AI Era

Dave Ambrose (20:53)

There’s an interesting shift happening where younger engineers often build heavily with AI tools. How do you evaluate candidates who may have very different development workflows?

Raj Patel (21:51)

We actually interview exactly the same way we did before AI.

We hire for first principles thinking.

We look for the smartest, most curious people who deeply understand their craft.

Because AI output still needs to be interpreted.

If you don’t understand the fundamentals, you can’t verify whether the output is correct.

Humans remain responsible for the result.

We also do not allow AI tools during the interview process.

As for adoption, it tends to self-select.

We’re a startup.

People join us because they want to work in a fast-moving environment and embrace change.

So culturally, the people we attract already want to experiment with new technology.

Where to Learn More About Discern

Dave Ambrose (23:17)

Raj, this has been fantastic. If people want to learn more about Discern or get in touch, where should they go?

Raj Patel (23:30)

You can find us at www.discern.com.

That’s spelled D-I-S-C-E-R-N.

And you can email me directly at raj@discern.com.

Dave Ambrose (23:41)

Awesome. Thanks so much for joining.

Raj Patel (23:43)

Thanks for having me.