[bayareaguy]

I doubt anyone lied to you zubar. At one former startup employer the founder hired me in part because some years earlier I was a co-founder of an unsuccessful company and at other established places I've been rejected for reasons similar to the one given to you.

Anything you do in your career has the potential to open or close some doors.

My suggestion is to be prepared to tailor things like cover letters and resumes appropriately for the position and be more selective in how you apply so as to maximize your chances. Unless you're very very good or lucky you're bound to have some kind of failure in your past. The important thing in this sort of interview situation is to be able to convince people you've learned the right lessons from the experience and are more valuable as a result.